Download Description
"""Guy Cohen is the master when it comes to taming the complexities of options. From buying calls and puts to iron butterflies and condors, Guy explains these strategies in a clear and concise manner that options traders of any level can understand. His chapter on options and taxes is especially welcomed (and needed). The Bible of Options Strategies is a straightforward, easy-to-use reference work that should occupy a space on any options trader's bookshelf."" ¿Bernie Schaeffer, Chairman and CEO, Schaeffer's Investment Research, Inc.
""The author delivers clarity, insight and perception making learning about options a joy, and practicing the art of making money that much easier: truly a bible from a guru."" ¿Alpesh B. Patel, Author and Financial Times Columnist
""Guy Cohen truly makes learning about options easy in this fact-filled guide. Bullet points make for a quick and enlightened read, getting to the heart of what you really need to know about each options strategy. This book is a must for any serious trader's library."" ¿Price Headley, Founder, BigTrends.com
Pick the right options strategies...implement them step-by-step...maximize your profits!
Introducing today's first and only comprehensive reference to contemporary options trading!
OptionEasy creator Guy Cohen identifies today's popular strategies...and tells you exactly how and when to use each one and what hazards to look out for! It's all here....
- Basic Strategies including: Buying and shorting shares, calls, and puts. I
- ncome Strategies including: Covered Call, Naked Put, Bull Put Spread, Bear Call Spread, Long Iron Butterfly, Long Iron Condor, Calendar Call, Diagonal Call...
- Vertical Spreads including: Bull Call Spread, Bull Put Spread, Bear Call Spread, Bear Put Spread, Ladders...
- Volatility Strategies including: Straddle, Strangle, Guts, Short Butterflies, Short Condors...
- Sideways Strategies including: Short Straddle, Short Strangle, Short Guts, Long Butterflies, Long Condors...
- Leveraged Strategies including: Call Ratio Backspread, Put Ratio Backspread, Ratio Spreads...
- Synthetic Strategies including: Collar, Synthetic Call, Synthetic Put, Synthetic Straddles, Synthetic Futures, Combos, Box Spread...
- ...and many more strategies...
Plus essential tax-saving information, and more!
- No other book presents this much authoritative, current information on options trading strategies
- Covers all of today's best income, volatility, leveraged, synthetic, and sideways market strategies
- Discover why each strategy works, when it's appropriate, and how to use it¿step by step
- Includes a full chapter on tax issues associated with options strategies
- By Guy Cohen, whose OptionEasy application has helped thousands of traders achieve breakthrough results!
The Bible of Options Strategies is the definitive reference to contemporary options trading: the one book you need by your side whenever you trade.
Options expert Guy Cohen systematically presents today's most effective strategies for trading options: how and why they work, when they're appropriate, when they're inappropriate, and how to use each one responsibly and with confidence. The only reference of its kind, this book will help you identify and implement the optimal strategy for every opportunity, trading environment, and goal."
Customer Reviews:
Truly the bible of all bibles!.......2007-09-30
I really enjoyed this book and continue to do so. As others have commented, it's not a cover-to-cover type of book, but I can reference any strategy so easily and get the salient information I need at the flick of a page.
I've also got the author's other book (Options Made Easy) and there's something different about the way he explains the subject of options that I previously found much more difficult and now find remarkably easy. Great book.
Great reference, full of errors.......2007-09-15
This book is an excellent reference book for options traders, novice and experts. It describes in great detail most of the strategies for trading options. I like the structure and the organization of the book. It helps easily locate a stragety based on several criteria, like your trading expertice or your perception of where the underlying stock is going.
I'm dissapointed at the amount of errors in the book. I've only read 2 chapters so far and have found, not only mispelled words, but errors related to the description of the strategy, risk and reward calculations and inverted names (call instead of put, for example).
If not for the errors, I would have given 5 stars to the book.
Technical Alanlysis "Bible".......2007-09-11
A large volume that covers just about anything you want to know about charting. I was most interested in Elliott Wave info and it has a good section about EW. For the options trader, this is the book to study.
good for beginner to novice.......2007-09-03
I meet Guy during SF Money Show,it was a good experience.
One thing that i notice from most of options book, they are all talking the same thing, mostly strategy description, including this book. What i want from this book is more explanation towards when and how to the strategy should be applied when fundamental, TA and sentiment comes to picture.
Good referrence book.......2007-08-23
I did learn a lot of reading this book. I have read a number of options book but what I liked the most about this book was the method that it used to cover the option strategies by grouping them. Also by covering the variables for each option strategy in the same manner.
I use the data in this book in another manner as well. Often different groups UBS etc ask me to invest in some product that they have developed. I graph the the possible results and then compare that graph to the graphs at the back of this book to find the closest option strategy. I then read up on that strategy establishing where it works best, worst etc. This often gives me some insight as to where if any the product might fit into my investemnt portfolio. This is not the only selection criteria but it helps.
Book Description
Reflecting today's market realities and the new innovative options products available, this fourth edition features an in-depth analysis of volatility and volatility trading; updated information on all stock option strategies, reflecting recent market conditions; buy and sell strategies for Long Term Equity Anticipation Securities (LEAPs); detailed guidance for investing in the growing field of structured products; the latest developments in futures and futures options; and the market impact of the most recent changes in the margin rules.
Packed with graphs and charts to clarify profit and loss potential, margin requirements, and criteria for selection of a position, this classic remains an indispensable resource for investors determined to master the world of options--and profit.
Customer Reviews:
Option Trading Bible.......2007-10-01
Considered by many professionals as the bible of option trading, Options as a Strategic Investment is a must have addition to any serious option's trader. Option trading is widely misunderstood and feared by many stock traders mostly because it takes real effort to really capture the mechanics that is behind this trading form.
This book will help anyone that is beginning in this exciting field to get a grip of all the things that is involved in option trading and is a great reference book for professionals. The lessons are clear and the information is up to date and straight to the point. Studying this book alone or even better...this book with a few other reference books will get you in the right direction of this often misunderstood but highly profitable form of trading. A must buy addition to anyone's trading book collection.
Excellent book!.......2007-09-19
This is an excellent book for the serious option's trader. Very detail and in depth explanation of all different types of option trading strategies. Recommended!
Worth the money!.......2007-06-27
This book is probably the best on the subject. It is usually called the Option Bible. It would be nice if it was updated to reflect some modern trades (e.g. condor).
A Good Investment For Learning More About Options.......2007-06-27
This book is written in clear, easy to understand language with examples that go further to clarify what a specific strategy/technique is. It is not a boring, academic book. The only drawback that I have run into is that the commissions for trades are far in excessive of what is available through internet brokerages. The impact is that sometimes the book will stress that commissions will make a big difference in outcome whereas that is not generally true in my experience. I immediately learned about using in the money covered calls that either produce income or significantly lower the cost per share of a security and profitably but this to use.
Don't EVER do options without this book!.......2007-06-08
After reading The Options Course by George Fontanills, which is a very good book for beginners, you'll want take the next step. This is THE ultimate book on options. It covers absolutely every aspect of options trading. Your mouth will drop after you put your hands on this book. There's a gazzilion ways to cut your risk and maximize profits, and this book reveals every single one in detail. Do yourself a favor and buy this book.
The only problem I see is that the book is really, really boring for beginners and people who are not serious about trading options. I was just learning the basics when I first read it, and it was pretty hard to finish it. Read a couple of other books on options for beginners (like George's) and start paper trading options BEFORE you buy this one. I read a lot of books before I started trading and hated most of them. Now that I know how the real thing works and all the potential, I feel much more compelled to read it all over again.
The book offers an overview of every trade possible, all scenarios and follow-up action. All the examples are very clear and well explained. There's a lot of ways to lock in profits too, all very well described. Even if you've been trading for 10 years, you will be amazed when you read this book. If you read it thoroughly 4 or 5 times a year, there's absolutely no excuse for you not to become a master in options trading. If all the other books are the options college, this is your PhD course.
Book Description
"Mun demystifies real options analysis and delivers a powerful, pragmatic guide for decision-makers and practitioners alike. Finally, there is a book that equips professionals to easily recognize, value, and seize real options in the world around them."
--Jim Schreckengast, Senior VP, R&D Strategy, Gemplus International SA, France
Completely revised and updated to meet the challenges of today's dynamic business environment,
Real Options Analysis, Second Edition offers you a fresh look at evaluating capital investment strategies by taking the strategic decision-making process into consideration. This comprehensive guide provides both a qualitative and quantitative description of real options; the methods used in solving real options; why and when they are used; and the applicability of these methods in decision making.
Customer Reviews:
Real Options.......2007-05-14
Mun's book shows how real options problems, like those faced in the real world, can be solved. Other books may provide a better introduction to real options concepts, but the methods employed are suitable only for very simple problems. Where other approaches require that you develop your own lattices (or other solutions), Mun shows you how to use his Supper Lattice Solver and Monte Carlo simulation software to solve these problems. I am convinced that his approach will not only facilitate the solution of these problems, but will also be more readily accepted by management. I look forward to acquiring Mun's software and applying it in practice.
The Second Edition - A Great Practical Guide through the Real Option Debate.......2005-11-30
As practitioners and academics continue to grapple with quantifiable uncertainties in real asset decision making, the debate about real option models will no doubt continue.
Johnathan Mun's second book and more specifically his case study approach allows practitioners from diverse industries to enter the debate with simple excel asset pricing skills. To my mind there is no better pragmatic work on the topic than the second edition of Real Options Analysis. With the book in one hand and the robust SLS software up on the screen - framing, pricing and understanding real options is pretty straightforward.
Two points to note: After 30 days, just as you begin to get hooked on the superb software it is likely to gently expire. That's when you are saved by the second point; the author is hugely supportive - His `one line insights' in response to specific queries made this a great purchase.
Edinburgh. Scotland.
On average: a good book .......2004-07-30
This was my first book on Real Options. After this, I complemented my knowledge with more accurate researches on the theoritic foundations on the subject (eg. Trigeorgis and Copeland).
What I liked of this text is that it was a soft landing into the Real Option world, with a simple and easily understandable description. Its major pro is to present transparently the basics of a concept that is often approached at a too high and formal level.
What I did not like is the fact that few chapters at the end were not really useful but full of stuff and formulas with no explanations that cannot practically be used. I had the sensation they were out of place, since I could grasp their meaning only after passing to more comprehensive books.
One more criticism is that you don't understand the effect of the difference between private and public risk in real options evaluation as you do with other texts. However, I still consider this the book where I formed my basics before being able to master some other more detailed book (but also more difficult to master). The Crystall-Ball package was also a nice surprise. At the end, if you consider the price and the content it was surely good value for money even though it's not a masterpiece.
An excellent book for intermediate reader.......2004-01-28
Mun's book is an excellent guide for those who have basic knowledge about asset valuation and want to study real options.
decent read on real options.......2003-07-07
decent read... did a good job on explaining practical uses of real options. would have been better if not so much written promoting the use of crystal ball. overall, happy to see that minimizes coverage on replicating portfolios and focuses on risk neutral prob. i recommend this book, especially if mba student and brief coverage in intro class of real options leaves you interested / unfulfilled.
Book Description
As serious and sophisticated investors know, options are a viable and increasingly popular way to enhance their portfolios. Yet even the most savvy investors need instruction.
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.
Customer Reviews:
Options workbook for Dummies.......2007-09-25
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.
I was confused about options until I read this book.......2007-07-16
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
Excellent learning book for technical option learning.......2006-07-09
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 :-)
Skeptical.......2006-03-03
I am skeptical over the reviews of this book. I bought it but returned the book to Borders after a surprise check on Amazon.com on the reviews by so-called "readers" here. If you look at the review dates, all were dated around May-June 2002. If you're not convinced, click on each reviewer and most of them actually did only review (5 stars) for this book. Who knows, it could be a marketing tactics? I went over to check Barnes & Noble and it was exactly the same.. reviews were all done from May-June 2002 then full-stop. So I'm not saying anything, I did buy the book for 2 days, but I was not impressed. No thanks.
Basic Simple Review.......2006-02-19
Good book for the basics of understanding the mechanics of options but not a lot of use for actual trading. It really is light on useful fundamental concepts you should use to trade - maybe that's what you get in the additional products they have for sale.
Book Description
Corporate finance and corporate strategy have long been seen as different sides of the same coin. Though both focus on the same broad problem, investment decision-making, the gap between the two sides--and between theory and practice--remains embarrassingly large. This book synthesizes cutting-edge developments in corporate finance and related fields--in particular, real options and game theory--to help bridge this gap. In clear, straightforward exposition and through numerous examples and applications from various industries, Han Smit and Lenos Trigeorgis set forth an extended valuation framework for competitive strategies.
The book follows a problem-solving approach that synthesizes ideas from game theory, real options, and strategy. Thinking in terms of options-games can help managers address questions such as: When is it best to invest early to preempt competitive entry, and when to wait? Should a firm compete in R&D or adopt an accommodating stance? How does one value growth options or infrastructure investments? The authors provide a wide range of valuation examples, such as acquisition strategies, R&D investment in high-tech sectors, joint research ventures, product introductions in consumer electronics, infrastructure, and oil exploration investment.
Representing a major step beyond standard real options or strategy analysis, and extending the power of real options and strategic thinking in a rigorous fashion, Strategic Investment will be an indispensable guide and resource for corporate managers, MBA students, and academics alike.
Customer Reviews:
Right book for executives.......2007-03-20
I develop practical Game Theory Simulation Models for strategy formulations, experiments, and selection. This book provided me with a practical guide how to use Game Theory and Real Options for strategic analysis.
The use of Real Option with Game Theory was new for me.
Well written this book it is a must for executives.
[...]
Product Description
"To invest or not to invest?" Business leaders frequently are faced with this question on new and ongoing projects. The challenge lies in deciding what projects to choose, expand, contract, defer, or abandon. The project valuation tools used in this process are vital to making the right decisions. Traditional tools such as discounted cash flow/net present value assume a "fixed" path ahead. But real world projects face uncertainties, forcing you to change the path often. This book introduces a more practical approach to project valuation known as real options analysis. Derived from options theory in modern finance, this approach is based on the Nobel Prizewinning work of three MIT economists.
Project Valuation Using Real Options provides a systematic approach to project valuation that will enable you to minimize investment risks, exercise flexibility in decision making, and maximize returns.
Key Features
Discusses why traditional valuation methods such as discounted cash flow, net present value and decision tree analysis are not sufficient in today's uncertain world
Explains the real options approach in a step-by-step manner which is easily understood and does not require an extensive financial background on the part of the reader
Shows you how to make the correct investment decisions, achieve strategic alignment of projects, increase project flexibility, and sustain competitive advantage
Presents multiple scenarios and real world examples from technology, telecommunications, pharmaceuticals, and other industries to illustrate success stories, challenges, and the true value of real options analysis
WAV offers free downloadable assessment tools and solutions to problems presented in the book available from the Web Added Value Download Resource Center
Customer Reviews:
Picking a Project that adds Value.......2006-10-26
This is the book for those serious about improving project selection results. This is the only book of its kind for today's project management professional. Finally, I feel I understand how to use this unique approach to evaluate all the options available in selecting projects that will significantly contribute to an organization's bottom line.
Lee R. Lambert, A Founder of PMP
Amazon.com
Huge payoffs in business usually entail embracing lots of risk. That's the message of Real Options, by Martha Amram and Nalin Kulatilaka. The authors argue that standard models of evaluating strategic investments fail to consider the element of risk fully. "Uncertainty creates opportunities. Managers should welcome, not fear uncertainty," write Amram, a California-based consultant, and Kulatilaka, a Boston University finance professor, in describing the "real options approach." The book provides plenty of theoretical case studies, formulas, and charts that demonstrate how to shape business strategies using a system based on option-pricing. The method can value everything from undeveloped land to untried products. "With it, market leaders will understand how value is created in an uncertain environment and will know how much risk they are bearing," the authors write.
Risk is also inherently dangerous--that's an unintended lesson of Real Options. The two Nobel Prize-winning economists whose work serves as the foundation for this book--Robert Merton and Myron Scholes--were the brains behind Long-Term Capital Asset Management, the notorious hedge fund that was rescued under a plan engineered by the Federal Reserve. With that caveat in mind, business planners and managers should pursue Real Options with their eyes wide open. --Dan Ring
Book Description
In capital investing, as in life, you always have options. In today's extremely turbulent world, managers recognize how risky the most valuable investment opportunities often are, and how useful a flexible strategy can be. That's why they want to know all their options. Yet many current financial assessment tools fail to identify what investors can do to capitalize on future uncertain events. Martha Amram and Nalin Kulatilaka suggest a smarter new way to think about strategic investments in terms of real options. By applying options thinking--the concept behind the recent Nobel Prize-winning work on financial options--to the evaluation of nonfinancial assets, this innovative approach brings a financial market discipline to the evaluation of a company's opportunities. Using real options theory, managers can more effectively target crucial opportunities to redeploy, delay, modify, or even abandon capital-intensive projects as events unfold. Corporate executives in finances, investments, and project management should share this book with decision makers in information technology, strategic planning, corporate restructuring, venture capital, and law. Through timely case studies, the authors show managers how to use real options to evaluate investments and create exit strategies in RandD, product design, contracts, and information technology. By linking strategic vision and tactical project decisions, Real Options helps to improve capital investment planning and results.
Customer Reviews:
A rather disappointing book for the general reader.......2005-05-02
I was rather disappointed by this book. I was hoping for something which could help explain to business managers why processes such as IT delivery are uncertain, and the value of delivering flexible solutions. The initial part of the book makes a lot of strong qualitative statements of exactly the right sort:
- There is great value in breaking up large projects in uncertain markets
- Options (flexibility) create value out of uncertain events.
- Exit options which allow you to step away from a planned path, even if relatively expensive, may have significant value.
- An option such as an exit option, can make an investment viable when it would fail a traditional NPV test.
- Small speculative investments can enable larger investments to benefit from learning and to be much more accurately targeted.
- It may create greater value to start many projects and abandon more, rather than aiming to abandon a minimum number.
Unfortunately the remainder of the book then supports these statements only for a very limited set of circumstances. The Real Options approach only seems to work if the option can be translated into (or at least mapped onto) a tradeable financial security. There's no real attempt to provide tools to evaluate internal uncertainty, such as the delivery uncertainty common in IT projects, or the value of flexibility except where it maps to significant investment decisions.
The book does do a good job of explaining that real world situations are non-linear, with value which changes as a result of natural volatility, over time, and as a result of one or more decisions. Traditional NPV-based approaches greatly undervalue flexibility, insurance, learning and platform investments, and can't really deal with this non-linear aspect. Simply increasing the investment discount rate, which is the usual way of dealing with such problems, doesn't bring the correct focus onto uncertainty and total risk.
However, the mathematical basis for Real Option valuation is not well explained, and I found the processes difficult to follow. I suspect that the authors implicitly assumed a certain familiarity with economic and financial market techniques and terminology, which limits the value of this book to those seeking, as I was, to apply the techniques to other fields. It also left me puzzled as to why simpler approaches, such as Decision Tree techniques, can't be used instead.
Surprisingly for a relatively short book the text is very repetitive, and too often turns into a blatant advert for the Real Options approach compared with others, rather than making the case on its own merits.
Hindsight is a great thing, but it is unfortunate that this book praises Enron as an example of success through options manipulation, where we now know this was largely a "long company" scam. Some of the other examples, quoted at the height of the Internet boom, have also not stood the test of time. However, these should not be seen as invalidating the approach, merely as evidence of how uncertain things may really be.
This book provides some good ideas, and if your focus is major business-critical financial transactions it may be very useful. But I'm still looking for a good book on how to generically value flexibility.
At least this book is readable.......2004-04-15
The only saving grace about this book is that it is readable. However, the reason for this is because there is not much to learn about RO from this book. The author's talk about numerous examples and the "concept" of how RO was applied. But, you will not learn the actual process of using RO, unlike Copeland's or Trigeorgis' book.
Good introductory real options book for beginner or manager.......2004-04-05
It is a good introductory book on real options targeted at the audience of managers rather than experienced financial practitioners. Its contents covered financial options, binomial pricing and Black-Scholes model where the last ten chapters or so are case studies dedicated to applications of real options where it gives readers an idea how real options can be applied in diverse industries.
It makes a good and easy read for anyone who wants a quick flavor of real options without going through too much of the horrible maths that derivatives and real options seems to have !
I personally enjoy reading it from cover to cover.
Best user friendly treaty on Real Options........2003-06-01
This is an excellent book on the subject. It is the most readable and user friendly book on the market on Real Options. You don't need to understand Greek to tackle this book unlike the other ones. The author clearly explains the Black Scholes option model, the foundation of option valuation. They then illustrate how this model can be applied to non option business investment opportunities. The authors establish a real option framework to handle your business decision. It explores many practical cases in detail, so you get a good feeling for this approach. The authors also flesh out when it is better to use Black Scholes vs. Monte Carlo simulation in order to make a business decision.
Shamelss self-promotion.......2001-05-30
This book is another good example of a phenomenon I call "Fad-peddling" at its worst. "Real Option Valuation" is just a fancy new name consultants-for-hire have made up to describe a set of problems economists like Dr. Pindyck have called "contingency claims" problems for years. Given the history of the two terms, I prefer "contingency claims", because of its record as a term used by economists in academic journals and because "real options" sounds too much to be like some new fad, like "reengineering" or "liberation management."
Most of the other reviews are absolutely right: this book seriously lacks any quantitative explanation. No need to look for kind words; this is a serious oversight. And yes, this book does read like a long sales resentation.
While the authors adequatley describe broadly how economists and financial executives solve contingency claims problems (generally using binomial methods, simulation, or partial differential equations), they don't teach any of these methods in any useful way. At best, after reading this book, you will be able to recognize whether or not your organization has any "real options".
Beyond the quantitative short-comings of this book, however, there are some flawed fundamentals about their whole approach: this book treats real options as a new finance panacea for the 1990's, and suggests that the world of finance in 20 years will be a very different place because of these revolutionary ideas. Contingency claims problems are limited to a very specific set of economic phenomena with specific criteria. If the criteria are not present, contingency claims models fall apart. Consider the amount of abuse something as well-known as the black-scholes option pricing equation is subject to when it is applied to "real options valuation": the black-scholes equation is a function of two variables, primarily: time and stock price variance. When you take this equation and try to apply it to, say, the valuation of an option to market patented drug, how do you define variance and time? Time in an option contract is fixed in the contract. Variance is empirically observable from stock prices. Plus, how do we know that the value of drug patents resembles stock prices (log-normal process)? What if it is more like the behavior of a commodity (mean-reverting process)? And where are we going to get the data from anyway? In that case, the black-scholes equation needs to be abandoned and an alternative partial differential equation needs to be developed. But who is going to do that? At what cost? Obviously, at a certain point the benefits derived from exactly modelling your options is eclipsed by the cost and effort involved in doing so. The scariest part, however, happens when you realize that the greater the variance (risk) and the longer the timeframe chosen, the greater the final value of a project or investment. Now the project manager who wants to sell ice to the eskimos has the quntitative methods available to justify such a high risk project. (Just think, the project manager could sell this project to top management as a long-term investment anticipating the melting of the polar ice caps, when the price of ice in Greenland is expected to go through the roof).
This book tries to reach too far, suggesting that phenomena which never should be valued as contingency claims can be valued as such. Real options (or contingency claims) are best treated as a very specialized set of quantitative techniques used to model very specific phenomena which a company may or may not be subject to see "Investment under Uncertainty" by Dixit and Pindyck for an inventory of those phenomena). Push the envelope too far and the paper tears as it does here.
Books:
- The Celestine Prophecy
- The Complete Idiot's Guide to Finance and Accounting (The Complete Idiot's Guide)
- The Design of Everyday Things
- The Dogs Who Found Me: What I've Learned from Pets Who Were Left Behind
- The Ecology of Commerce
- The Elegant Solution: Toyota's Formula for Mastering Innovation
- The Fifth Discipline: The Art & Practice of The Learning Organization
- The Great Game of Business
- The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site
- The Independent Film Producer's Survival Guide: A Business and Legal Sourcebook
Books Index
Books Home
Recommended Books
- Disciplined Minds: A Critical Look at Salaried Professionals and the Soul-Battering System That Shap
- The Wisdom of No Escape and the Path of Loving Kindness
- Subtraction Unplugged-Minuends to 18
- Successful Cold Call Selling: Over 100 New Ideas, Scripts, and Examples from the Nation's Foremost S
- Switching to VoIP
- Thicker Than Water
- The Time Traveler's Wife
- 2001 CPA's Guide to Effective Engagement Letters: Implementing Successful Loss Prevention Practices
- The Economics of Adjustment and Growth: Second Edition
- The Night Visitor: And Other Stories
General
| Popular Economics
| Business & Investing
| Subjects
| Books
Options Made Easy: Your Guide to Profitable Trading (2nd Edition)
Option Volatility & Pricing: Advanced Trading Strategies and Techniques
Options as a Strategic Investment
Get Rich With Options: Four Winning Strategies Straight from the Exchange Floor (Agora Series)
The Option Trader Handbook: Strategies and Trade Adjustments (Wiley Trading)
