Book Description

Given the success of the first edition of this book, the author updated its content, confirming the consistency of some strategies presented, and added a new strategy developed during the past year.Trading is hard! Volatility trading is even harder! The goal of this book is to deliver a profitable and actionable trade plan to trade in volatility, applying options techniques and proven strategies using VXX ETN due to its high liquidity. This book also intends to pay tribute to first VXX, former volatility ETN, which the author has been trading exclusively in the last few years. The book won't teach you the basics of options trading strategies (verticals or iron condors spreads to name a few). This book will explain in detail and, in a concise language, the author's Trade Plan and how he uses options to trade that ETN. It was written by a trader and is meant to target traders interested in stock options, and the way risk management applies to volatility trading. Nevertheless, you don't need to be an expert in stock options trading and need to possess only basic knowledge.The book starts with key learnings from the author's bad experiences, which are a good starting point. It goes through the understanding of volatility instruments-from VIX futures structure and how they impact strategies to use-the selection of ETNs Exchange-Traded Notes (ETNs), and then move to an actionable options trading plan. There are some strategies to be applied for every market environment (or volatility level) with clear descriptions of how to apply them as well as its management through adjustments and hedging strategies, also using options.Volatility is clearly a new asset class with its own unique specifics that put it in a different level of common equities, equity ETFs, indexes or commodities. Using options to manage risk, the author explains in detail their portfolio of volatility options strategies and how he uses them, with entry, exit points, adjustments, etc., but always with the overall risk portfolio management in mind.This book will focus on trading options on VXX, the most liquid volatility ETN and the first to be launched in the market. This book provides you with proven, precise, and fundamental rules to trade effectively volatility with options. It supports its options strategies with years of backtesting and author experience as a trader. All strategies presented can be applied in conjunction or individually. The usage of each options strategy will depend on market conditions, either with low volatility (under contango) or high volatility (in backwardation).To sum up, the author discloses the options strategies he uses to trade volatility with options on VXX, minimizing trading subjectivity (purely mechanical with clear entry, exit and adjustment points). But before going into detail, he gives you all the background needed to understand what this new asset class is - Volatility.Add this book to your library if you are looking to increase knowledge on volatility trading and/or options trading and how to trade effectively with a clear Trade Plan that is successfully being applied.