Basic Black-Scholes: Option Pricing and Trading by Timothy Falcon Crack

This week's featured book on options trading:

Basic Black-Scholes: Option Pricing and Trading
by Timothy Falcon Crack
Timothy Crack (April 2009)

From the publisher: This is the revised second edition of Basic Black-Scholes. This book gives extremely clear explanations of Black-Scholes option pricing theory, and discusses direct applications of the theory to option trading. The presentation does not go far beyond basic Black-Scholes for three reasons: First, a novice need not go far beyond Black-Scholes to make money in the options markets; Second, all high-level option pricing theory is simply an extension of Black-Scholes; and Third, there already exist many books that look far beyond Black-Scholes without first laying the firm foundation given here. The trading advice does not go far beyond elementary call and put positions because more complex trades are simply combinations of these. The appendix includes Black-Scholes option pricing code for the HP17B, HP19B, and HP12C.

This revised second edition is accompanied by two downloadable spreadsheets. The first allows the user to forecast transactions costs for option positions using simple models. The second allows the user to explore option sensitivities including the Greeks.

This edition also includes Bloomberg screens and expanded analysis of Black-Scholes interpretations.