Anthony Saliba


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Anthony Saliba is founder and Chairman of International Trading Institute, a derivatives training company which has trained over 4,000 professionals in its 12 year history.

Mr Saliba started his trading career at Chicago Board Options Exchange in 1979 trading equity options as an independent. In the next 11 years , he expanded his trading horizons to include most CBOE products, currencies and the S&P 500 contracts on the CME, as well as agricultural and interest rate products traded on the CBOT. His trading skills were recognised by Jack Schwager in 'Market Wizards'.

Trading listed options

Tony Saliba along with business partners Joe Corona and Chris Hausman share credit for these trading rules.

  1. Speed is more important than accuracy when market-making.

    Having a sophisticated pricing model, with a proprietary number of iterations is meaningless if you don't get in on the trade. Most differences in pricing can be made up with better hedging activities and less slippage.

  2. Price is more important than speed when investing.

    Customers who complain about commission levels will tell you that if they can get the trade done at a tick or two better in price, it's worth taking your time to do the trade right. Two years ago, even a minute for a turnaround was 'down-in-the-noise'; now investors can get speed and better pricing in options trades.

  3. Don't worry about the put/call ratios, they're noisy bastards.

    Institutional hedging, spread trading and overnight legs are among the culprits that render this daily indicator as valuable as a flip of the coin.

  4. Volatility should be a thermometer for traders and a compass for investors.

    Traders can take a constant reading of Implied Volatility, exploit it, and use it to maintain the financial health of their 'books', whereas investors making long- term investment decisions should make the journey using volatility as a co-pilot.

  5. Options vernacular is inside out and upside down.

    Spreads are considered 'risky, complex strategies that should only be used by advanced traders'. In reality, spreads reduce risk and are usually safer than an outright purchase or sale of a put or a call.

  6. Implied volatility is meaningless in expiration week.

    Option volatility on expiring options is not worth discussing because there is no vega. Too many traders get hung up looking at 'implieds' in expiration week - that game is over.

  7. Another way to look at volatility is like a car zigzagging through a highway of news, avoiding/ hitting bumps and potholes along its way.

    In our age of technology, events drive volatility in a digital manner. Expect a changing landscape as news paints the path . Don't let volatility scare you away or upset your stomach. Enjoy the ride.

  8. My favorite: 'A good spread at bad prices'.

    Instead of blowing out of a loss immediately, look for a spread hedge and turn a bad trade into a good spread, but perhaps at a bad price. This is your 'repair' exit.

  9. Getting out of a bad trade: 'The first cut is the cheapest.'

    Too many options traders hang on to positions as they go against them, hoping that they will come back. This leads to massive hemorrhaging - repair immediately or cut and run.

  10. When in doubt, get out!

    When you put on a position that makes you feel uncomfortable, or that just doesn't inspire confidence, while hearing a little voice say: "get the hell out!" - trust your instincts .

www.salibaco.com



Global-Investor Book of Investing Rules(c) Invaluable Advice from 150 Master Investors
The Global-Investor Book of Investing Rules: Invaluable Advice from 150 Master Investors
ISBN: 0130094013
EAN: 2147483647
Year: 2005
Pages: 164

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