Option Strategy Risk / Return Ratios: A Revolutionary New Approach to Optimizing, Adjusting, and Trading Any Option Income Strategy Paperback – April 22, 2014

Before getting into the book, I must disclose that I have known the author since 2008 when he taught an undergraduate financial derivatives class that I completed. Despite this fact, I have done my best to provide an objective review of the material.Option Strategy Risk/Return Ratios will benefit the speculator who has a thorough understanding of option Greeks. If you are not familiar with option Greeks, the book has a chapter devoted to providing a high level overview of the Greeks, but you may want to take a deeper dive with additional resources to best utilize the logic in the book.The author focuses on developing market neutral option income strategies that derive value from positive Theta (benefit from the passage of time). Taking the concept a step beyond simple position construction, Brian walks through the development of an innovative process that allows traders to objectively measure the risk/return profile of these option combinations, allowing for adjustments to positions to maintain the optimal return profile relative to assumed risk.This is institutional quality research provided by a successful market practitioner who also has a penchant for teaching. Despite the seemingly advanced nature of the subject, the material is dispensed in easy to digest increments, with multiple references to stated goals and objectives that help the reader frame a thought process in the context of a larger idea. Furthermore, with the book you’ll get access to an Excel model that produces the ratios discussed in the book, thereby allowing an individual to immediately put these concepts to work.There is certainly something to be gained in this book for all traders. However, if you are a purely discretionary trader you may be better suited elsewhere. For those who have familiarity with systematic trading or option Greeks, the novel concepts in this book are certain to add value to your investment process.

Appears very thorough. Seems quite complex for those readers which are not "numbers people". Likely destined for those already familiar with the strategy (condors and butterflies) and seeking math / statistical tools to improve accuracy.

Before going into the core of the review, I must mention my background. I am a 23 year old student from Argentina, who has just completed a university degree on business. This is very important because I believe it can be a helpful review for people around my age or with a similar situation.First of all, I did have some finance courses (mathematics of finance, financial administration and politics, and capital markets), but I did not learn much about options, only basic aspects. Therefore, as you can imagine, the language and concepts used in the book were new and complicated for me. Thus, after I started reading Mr. Johnson's book, I decided to give it a rest and rather dedicate my time to easier options books. After around two weeks of diving into other books and getting used to new concepts and ideas, I gave this book another try. Needless to say, this second read was much more informative and illuminating. Also, as stated by my 5 star score, I find it to be one of the best books I have read on the subject. I understand that my limited reading experience in terms of books about financial options might cause some people to discredit this review, but please let me enumerate the reasons for which I find this book to be excellent:1) Innovative ratios for measuring and comparing risk and reward, which are applicable to different scenarios (in terms of factors & time periods, among other concepts) and markets2) Includes and dedicates numerous sections of the book to refer to horizontal and vertical skew, and how they affect option strategies and therefore must be taken deeply into account3) Gives several examples whilst applying new formulas and concepts, together with step-by-step explanations, before diving into how current option strategies can be improved4) Dedicates a whole chapter to explaining how these revolutionary formulas and concepts can be applied through optimization software and the usage of programs such as Excel, so as to find the best possible outcome, and the be apply to constantly adapt it to changing market conditionsOverall, I found to book to be very consistent in terms of explanations. and I must admit that the optimization chapter is both essential and the main reason I rate this book with 5 stars. Not only does Mr. Johnson explain his reasoning for the application of these types of strategies, but he also gives numerous examples (whilst using software images to serve as a visual aid) and goes even further by establishing a draft model for designing an optimization platform.In conclusion, this definitely is a book worth looking into if you are interested in financial options/market-neutral strategies/option strategy optimization and are willing to put in the time to take full advantage of the ideas, concepts and formulas introduced by this book. One last remark I want to make is that I have read some reviews mentioning that it is extremely difficult or even impossible to apply the concepts established inside this book. I heavily disagree, since the optimization chapter is specifically dedicated to that, and personally I am almost finished with my excel spreadsheet designed for option strategy optimization applied through Mr Johnson's concepts and formulas. Even though I have used both Excel and it's programming language VBA in the past, I am by no means an expert on the subject. And, even though the effort required is considerable and the process time consuming, the benefits from developing a very valuable optimization platform highly outweigh the lesser drawbacks.