The book not only explains exactly how to use well-known volatility strategies like straddles and strangles, but also compares them in detail to ratio-backspreads where he shows how risk can be even better mitigated. That is one of the unique areas of this book and one of the most valuable.

Another thing I liked is the author’s intimate understanding of your emotions when a trade is on, and how to manage your trade practically so you retain your sanity. He explains that the biggest losses tend to come where a trader doesn’t grab the opportunity to take a profit when it presents itself. How true that is! This forms the essence of Cohen’s trading plan to take some profits off at a conservative initial profit target, but allow the remainder to trail any remaining profitable movement for a potential “windfall” gain. In trending markets this trading plan is golden. In rangebound markets the trading plan will keep you out of too much trouble.

I recommend this book for the beginners as well as the seasoned traders. Volatile Markets Made Easy will certainly help you make money and is a must read book for these volatile crazy markets.
Rating: 5 / 5

Trading is always profitable, if you get the direction right (usually Up for long Calls and Down for long Puts). When you get it right, have a plan for taking profits. For those times when you don’t get it right,

Guy has a good suggestion: Base your Stops on stock price and not on the option price.

The discussion on Greeks is excellent; the graphics (screen shots) would be easier on the reader’s eyes and brain if they were a bit clearer. Of course I am picky about clarity, because I am spoiled by the absolute clarity in Guy’s writing. For example, while discussing implied volatility Guy writes: “If volatility in the markets continues to rise, then buying these options will be rewarded by higher premiums, provided the implied volatility of the options follows suit.”

Although Guy seems to prefer simple line diagrams (example Figure 4.1 Straddle Components) I would recommend a forward reference to Figure 4.6, p111 which better illustrates the relative axes positions essential for the understanding of the Straddle risk profile. The same applies to Strangle (Figure 4.2 vs. Figure 4.19).

I am somewhat puzzled by the section `Adjusting Trades and Gamma Trading’ (p 129), which does not appear to meet the clarity standards I expect from Guy’s writing.

While most authors shun using mathematical equations, I appreciate Guy’s daring inclusion of Option Pricing Models (Black Scholes and the Binomial model). This will encourage at least some readers to be exposed to `what creatures these pricing models are’, in spite of lack of inclination to grasp the concept in detail.

Perhaps the best one learns by reading Guy’s books is his simple trading philosophy: “… by taking profits early, we remove stress from our trading even if it means we don’t make the maximum amount from each and every successful trade.” I couldn’t agree more since `no one goes broke taking profits’.

Options Made Easy: Your Guide to Profitable Trading (2nd Edition)

Option Spread Strategies: Trading Up, Down, and Sideways MarketsOption Spread Strategies: Trading Up, Down, and Sideways Markets
Rating: 5 / 5

The highlights include detailed examination of consolidation patterns (the

author is well known for focusing on these) together with the following ways

of trading them:

Long/short stocks

Straddles and strangles

Diagonal calls and puts

Call and put ratio backspreads.

Plenty of illustrations as per usual with this author, which really helps.

Another thing I really liked was how he compares one trade with another by

just tweaking a strike price or expiration so you can see the impact on the

trade. Aside from being technically very sound, from a practical

perspective this book is already proving its worth to me in a real sense.

One of the teachings is about how to take profits and not allowing winners

to turn into losers. This has already been invaluable and contributed to

several nice trades where I took my first profit earlier than I would

normally do so. As a result when the stocks turned around I’d already been

able to protect my initial profit – very nice.

An easy 5-stars, and a book that’s already a dog-eared keeper on my desk!

Rating: 5 / 5

I have been trading the markets for some years and have been generating quite a decent income from it just by applying a couple of very simple strategies. However, like most traders, my trading has always been plagued with some common problems: being stopped-out too early and too often, my entry order being triggered prematurely and then the market turning against me, not knowing when to take a profit and then finding myself leaving money on the table.

I have to say that had I read this book ten years ago, I would not have made so many mistakes in my trading. Guy Cohen explains that there is actually indeed a solution to the problems mentioned above. For example, he explains how by trading flag patterns (in the style that he trades them) we can avoid prematurely entering a position, whether long or short. Furthermore, I am convinced that following his strategy, there is indeed a way we can significantly reduce the rate at which we are stopped-out of a trade. For example, he explains very clearly there is a science to placing your stop-loss depending on what you see on the chart. Plus I now have a clear plan as to when to take profits.
Rating: 5 / 5

If you don’t know how to profit from explosive movements up or down or have a history in mutual funds or buying stock alone then this is a must-read book for you. With an established track record in making options easy and accessible to the retail trader, Guy Cohen builds on earlier work to provide key insights that every trader and investor should know. A must read for all who are seeking better control of their own financial futures.
Rating: 5 / 5