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The Business of Options: Time-Tested Principles and Practices

ISBN: 978-0-471-15125-8
256 pages
February 2002
The Business of Options: Time-Tested Principles and Practices (0471151254) cover image


The Business of Options shows how to conduct a professional options business. While it addresses the principles and practices of option trading and hedging in great detail, the book is the first to do so from a management perspective. O'Connell's extensive experience in option trading, training, and consulting enables the book to offer a unique combination of sophistication, clarity and insight. Most option books that are written for professionals focus on advanced math or on specific trades. This book goes farther, incorporating broad strategic considerations and exploring the implications of likely human behavior. It often challenges conventional wisdom of "what works" in the options business. Its intuitive approach to complex issues involving options enables readers to stretch their mathematical capabilities. Its down-to-earth explanations about the business of options reflect both the optimism and skepticism of a seasoned practitioner in the option market who has, for over 20 years, advised and trained professional dealers and users of options around the world.
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Table of Contents


Are You Too Anxious to Win?

What's Different about Options?

Strategic Concepts and Principles.

Getting a Feel for Option Dynamics.

Option Valuation Models.


Greek Letters.

Thinking about Option Risk.


Neutral Spread Dynamics.

Comparative Strategy Analysis.

Position Management.

Framework for Risk Management.

Some Ideas for Personnel Management.


Speculative Trading Principles.

Hedger Motivation and Behavior.

Positions for Corporate Hedgers.

Use of Options in an Investment Portfolio.

Living with a Hedge.

Epilogue: What Kind of Business Is This?

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Author Information

Martin P. O'Connell is President of O'Connell and Piper Associates, a Chicago-based options advisory firm. Since 1977, he has provided training, consulting, and trading advice to many of the world's leading commercial and investment banks, members of securities and futures exchanges, corporate hedgers, and institutional investors. He is best known for

his extended, comprehensive seminar programs. O'Connell is an individual member of the Chicago Board Options Exchange. He holds a BS in electrical engineering from the University of Notre Dame, as well as JD and MBA degrees from Stanford University.
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