Rating: 4.5/5 Stars
Rank: 4701

Natenberg not only takes great pains to explain the concept of volatility, in addition to other inputs into an option pricing model, but clearly shows that option pricing isn't the exact science many seem to believe, for the simple reason that we never know if our volatility estimate is correct.

I suspect many traders just don't understand the severe limitations current models have in different situations (ie. how the Black-Scholes model underprices options near expiration).

For the mathematically inclined, there are ample formulas and equations in the appendix.

Read it, study it, and apply the concepts to develop your own trading system.

Customer Reviews

2.	Great book for prospective traders
	(New York, NY USA) August 11, 2000 - 5.0/5 stars
	With the popularity rise in options and option strategies, I must admit this is a great book to get started with. I am a clerk at the CBOE and have studied this book thoroughly, and in my experience it's the best options... read full review
Current Review
3.	Another book the CBOE should force all traders to read!
	(Nutley, NJ United States) January 13, 2001 - 5.0/5 stars
	If you trade options, you will quickly learn that it is essential to understand the concept of volatility. Natenberg explains the concept of volatility in great detail, and shows how this concept applies to different option... read full review
4.	Real Stuff
	(Cleveland Ohio) February 1, 2000 - 5.0/5 stars
	This should not be your first book on options, but it should be your first book before you trade options. This is the real-deal, the tuff-stuff, the holy grail. If you can't understand Ratio Backspreads as explained... read full review

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