The Options Workbook: Fundamental Spread Concepts and Strategies for Investors and Traders, 3rd Edition

Now in its third edition, The Options Workbook has been updated and reformatted in a larger, more convenient, and user-friendly design. Three all-new chapters explain key trading concepts-volatility, the collar, and the covered call-and show how these can be applied to mitigate risk and increase profits. What’s more, this fresh edition incorporates additional interactive content-exercises, hands-on tools, and lessons that complement the in-depth curriculum on ITI’s Web site, www.itichicago.com.

This book covers just about everything you'd like to know about options in an easy-to-understand and concise format. In this book, you'll find such basics as the definitions of short puts and calls and long puts and calls, to advanced options strategies, such as vertical spreads, butterflies, condors, ratio spreads and back spreads. There's also an informative final chapter on the evolution of the option trading industry. To help test your knowledge and understanding, and to prove that you weren't asleep, there are quizzes at the end of each chapter, along with a final examination at the end of the book. You can even have your exam results graded by Mr. Saliba's team.

Mr. Saliba has a a unique perspective of having traded professional for over 20 years. Unlike other well-known options traders, there is a mystique about Tony that makes this book unique. Tony is the only option trader who can say that actually earned over $100,000 every month for over six years. When all that you read in this book is framed in that context, you know the strategies you're learning are not just theoretical. They're real McCoy strategies that are being used everyday by Tony and his team of traders.

For traders that already know about options, the beginning of this book may seem somewhat obvious, as Mr. Saliba goes through a short introduction about the today's option trading environment. A rather lengthy glossary of options terminology follows, which I found somewhat awkward as glossaries are usually placed at the back of the book. I guess, though, this is a good thing for beginners.

Each option strategy from a long call to long butterfly is explained in an easy-to-comprehend manner. It almost feels as if you were at a seminar. He explicitly tells you the ideal market conditions for each strategy, why it used, what it accomplishes and then walks you through an example. He also explains important points such as the breakeven stock price of each strategy and maximum profit and loss characteristics.

My favorite part of the book was the section on the "Greeks," or option analytics. If you pick up any other options book and read through the section on the "Greeks," you'll most likely find complicated mathematical equations and hard-to-understand academic jargon. You won't find that in this book, as Mr. Saliba explains the "Greeks" from a real trader's point of view. He will clearly tell you how these factors affect the option's price and how it will affect your position.

If you read the book and do the quizzes, you can't help but to learn more about options. For the beginner in options, this book is more than a workbook; it's really a manual. For the intermediate or seasoned option trader, it provides a great review of fundamental concepts and strategies.

I believe that no other options books can convey the subtleties of real options trading for this reason. You may learn the mechanics elsewhere, but it's the practical application that I believe truly makes this book stand out of the crowd.


Excellent learning book for technical option learning   July 8, 2006
J. W. De Roode (Maarn, Netherlands)
13 out of 13 found this review helpful

This books explains most option constructions and how to calculate there potential profit. If you need to train yourself in spreads concepts, this training manual is for you. First the spread is explained and then some calculation examples are given. Don't expect a when to use these spreads manual. It's not there. This is a excellent book for training yourself in setting up all kind of option structures and know what the costs are and profits. Also all the Greeks are explained in detail, and the first manual that makes it understandable for me :-)


The Perfect Place To Start   July 9, 2002
15 out of 19 found this review helpful

This book is just what I needed. I've been interested in options trading for a long time, but never found anything that could make sense out of how it works. This book did it for me. This guy, Tony Saliba, obviously knows his stuff - he didn't get profiled in "Market Wizards" for nothing. He earned his stripes through hard work and a proven plan that will work for anyone willing to learn and apply his fundamentals.

If you're interested in learning more about trading options, this is the place to start. Get the right info. from someone who has 'been there, done that' and take advantage of what he's learned along the way.


I was confused about options until I read this book   July 16, 2007
Craig Nybo (Salt Lake City, UT USA)
7 out of 8 found this review helpful

I am an amateur stocks and options trader. I have read, and continue to read, many books about the markets, about stocks, and about options. Options are more interesting to me than any other investing medium because of the ability to make quick gains and because of the innate limitation of losses. With so many options plays in existence, it's easy to get confused.

I picked up The Options Workbook and it cleared away much of the mystery of options investing. This book outlines the most common options plays including spread concepts, butterflies, condors, and many other trading techniques. It contains a primer that teaches about the Greeks, and about how to read the fundamentals on potential investments.

I didn't find a lot about chart reading technique n this book, but you can get that from other excellent books. Part of this book's strength is found in its quick charts that show, at a glance, exactly how to execute most options strategies for upward and downward moving markets. Since I have read this book, I have traded nothing but options and have grown my portfolio steadily. I'm no longer interested in buying stocks; they are simply too expensive and slow moving.

Hope this helps.

- Craig Nybo, co-author of Total Human: The Complete Strength Training System



Options workbook for Dummies   September 25, 2007
Reginald Tucker
5 out of 6 found this review helpful

I picked up this book in preparation for an interview I was having in the equity structured products desk at Morgan Stanley. Although I had taken a Financial Derivatives class at Wharton, this book helped explain the basics. It goes through all of the fundamental and basic strategies, as well as spreads. The value in the book is in doing the examples and working out the max gains, loses, break-evens etc. It seems basic but as you begin to put together more complex trades these exercises stay with you and guide your understanding. The book also does a decent job of explaining the Greeks and volatility. You won't come away ready to put on any overly complex trades, but you might be comfortable putting on your first call back spread knowing what your risk and reward profile is.