Best options trading book 2013

Top 5 Books to Become an Option Trader. Many consider options trading an unfamiliar and daunting area of investing. Fortunately, there are plenty of excellent books written on the subject to help traders understand the options markets and learn to trade them profitably. Here are five of the best available books that provide a clear education on options trading, as well as instruction on using various option trading strategies. "Option as a Strategic Investment," by Lawrence McMillan. Considered by many to be the Bible of options trading, Lawrence McMillan’s classic from 1980, “Options as a Strategic Investment,” provides traders with practical option trading strategies designed to minimize risk and maximize the profit potential for an investment portfolio. At over 1,000 pages, the book is an exhaustive reference on trading options. It contains information on the concept of using options investments, specific option strategies and market conditions in which they tend to work best, obtaining the best possible riskreward position for an investment portfolio, using options as a hedge, and how tax laws apply to option trading profits or losses. The book also offers detailed advice on trading index options, trading options on futures, and measuring and utilizing market volatility. Further, McMillan provides extensive examples and illustrations of numerous option trading strategies. "Option Volatility and Pricing," by Sheldon Natenberg. Understanding market volatility and its relation to option pricing is key to helping traders conceptualize option pricing and evaluate fair value in the options market.

Sheldon Natenberg’s “Option Volatility and Pricing” is considered one of the best volumes on this critical aspect of option trading. Natenberg provides a clear, solid explanation of theoretical option pricing models, followed by instruction in specific trading strategies that have historically been the most profitable in various market conditions. He provides a wealth of material on risk management and evaluating trading opportunities in options, and even includes material on creating your own option trading strategies. Natenberg presents his material in a clear, easy-to-follow manner and helps readers to understand the key concepts involved in trading options, such as the relation of options to their underlying asset, volatility, and option pricing and the time value of options. "Fundamentals of Futures and Options Markets," by John Hull. Options trading is particularly popular with traders who regularly trade the commodity futures markets. John Hull's "Fundamentals of Futures and Options Markets," which is considered a companion text to his “Options, Futures and Other Derivatives,” offers a clear understanding of the futures and options trading markets. Hull is a widely recognized authority on derivatives, futures and risk management who has served as a consultant to many of the best-known investment banking firms. Considered an excellent reference work for both beginners and seasoned option traders, Hull’s book includes information on swaps and other derivative instruments, trading interest rate futures and estimating the time value of options, all presented in an easy-to-follow manner. "Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits," by Dan Passarelli. A large part of mastering options trading lies in understanding what are referred to as the “Greeks." The “Greeks” are the Greek terms delta, theta, vega and rho, which refer to, respectively, option price movement in relation to underlying asset price movement, time value of options, volatility-related option price changes, and option price movements caused by changes in the risk-free interest rate, commonly equated with the yield on U. S. Treasury bills. Passarelli's book explains the impact that each of these factors has on option values and presents various option trading strategies that seek to profit from changes in any or all of the “Greeks.” Passarelli aims to provide traders with the necessary knowledge and tools to more accurately evaluate option pricing, as well as better identify a variety of profit opportunities available through the skillful use of options trades.

"The Option Trader's Hedge Fund," by Mark Sebastian and Dennis Chen. “The Option Trader’s Hedge Fund,” penned by Mark Sebastian and Dennis Chen in 2012, offers traders an option trading business model to earn consistent profitable returns from options trading. In the book, option trading coach Sebastian and hedge fund manager Chen provide a step-by-step plan for setting up a short option investment portfolio, designed to generate steady income from selling, or writing, options. Sebastian and Chen present the idea of essentially setting up your own individual hedge fund as an options trader. The book’s numerous examples and illustrations make it easy for even a novice options trader to understand the option trading strategies presented. The authors offer especially helpful advice on the key options trading elements of risk management and volatility. Learn Options Trading with these 2 Great Books. Over the years I have read and reviewed many books on the market covering a variety of topics. When it comes to learning options trading specifically, there are two great books that I always recommend when talking to friends and family. Yet, among the several dozen options trading articles here on the site, I realized I have never written a blog post on the books I enjoyed so much as a beginner and still reference today.

The Options Playbook, 2nd Edition. This book is written by Brian Overby, the options guru from online broker TradeKing. What I love about this book is the opening few sections, which break down the basics of options in everyday terms, using loads of images to break through the over complex mumbo-jumbo. After introducing the basics of buying and selling, greeks, method, risk, etc. the rest of the book is dedicated to breaking down 40 different options strategies . What I enjoy most about this section of the book is the format. Each “play” is visualized with a giant graphic alongside a breakdown of the setup, who should run it (extremely important as experience really does matter), several tips, and finally method details. Fantastic for beginners, I highly recommend this book for those looking for a solid surface level intro to options. The only gripe is that it is only available in a spiral hard cover format, no paperback version or kindle version. The Rookie’s Guide to Options, 2nd Edition.

The book is written by a long time friend of mine, Mark Wolfinger, who wrote most of the options education articles for StockTradingToGo. The Rookie’s Guide to Options is longer and more in depth than The Options Playbook. Furthermore, the format is much more text heavy versus the visually friendly Options Playbook. Lastly, the book includes Quizzes at the end of each chapter which serve as a nice recap as you progress. Mark is a 23 year veteran of the CBOE (Chicago Board of Exchange) and has a very conservative approach to trading options. As such, Mark reflects this in his book, spending extensive time on conservative strategies such as covered calls, collars, and the like. With options being so complex, Mark’s focus is longevity and capital conservation, not getting rich quick, and that is a critical foundation for any new investor, not too mention veterans. The Rookie’s Guide to Options 350+ pages will take time to read as it is detailed and in depth, however I highly recommend it to all new investors who want to take options seriously and desire to be successful over the long haul. Other Valuable Resources. Join Over 22,000 Investors. Receive Weekly Market Recaps directly in your email inbox! Log, Store, and Analyze Your Trades. Join over 22,000 investors and sign up today for our free weekly newsletter. Latest Market Recaps.

©2017 Reink Media Group LLC · All Rights Reserved. Best options trading book 2013 When we first started learning options we took what we define as the normal learning path. We started with a simple Google search on option trading and began to read. and read. and read. While we picked up a lot of great information it was only in small bits and pieces and it was very random. The great part about the web is that you can find information on any subject at the touch of a button. The bad part is that it is only on a certain segment in that subject and not the big picture. Who is going to write a 500 page blog post that encompasses all of options? One of the best ways to start into a new subject is with a good book. Books have a better opportunity to give you the big picture on a subject.

Not only do you get a lot of information but it is in a format that follows a learning path. A learning path is a guided journey through a subject making sure you learn everything in the correct order. A website full of blogs and articles causes you to jump around from one section to the next without a definable path. This is great if you need some quick information but horrible if you want to learn from start to finish. Thanks to places like Amazon it is even easier to get that book into your hands. With hundreds and sometimes thousands of books on a single subject it can be difficult to figure out which of those is "good". What we have done is compiled a list of our top five favorite option trading books plus a bonus book at the end. Many of these books we have used ourselves as a learning source or a simple reference guide. There are a lot of moving parts with options so having a quick reference handy is always a necessity. Option As A Strategic Investment by Lawrence McMillan. If you could only pick one book from this list to buy this would be the one you need to get. At over 1000 pages this book will be your option trading bible. Here is the quick description: The market in listed options and non-equity option products provides investors and traders with a wealth of new, strategic opportunities for managing their investments. This updated and revised Fifth Edition of the bestselling Options as a Strategic Investment gives you the latest market-tested tools for improving the earnings potential of your portfolio while reducing downside risk—no matter how the market is performing.

Written especially for investors who have some familiarity with the option market, this comprehensive reference also shows you the concepts and applications of various option strategies -- how they work, in which situations, and why techniques for using index options and futures to protect one’s portfolio and improve one’s return and the implications of the tax laws for option writers, including allowable long-term gains and losses. Detailed examples, exhibits, and checklists show you the power of each method under carefully described market conditions. This book is broken down into several important categories: Basic Properties Of Stock Options: This is your basic introduction to options covering definitions, symbology, order entry, and profit and loss graphs. It won't spend too much time into any one of these subject but it does give you a good starting point. Call and Put Option Strategies: Lawrence McMillan doesn't waste any time jumping into option strategies. Each method has is its own chapter and each one gets its own personal touch. You won't find him talking about the same type of information for each method. He tailors the section and comments to fit the method. His descriptions are mostly unbiased and focus on telling you the most important information about each method. Additional Considerations: This section talks about the smaller subjects of option trading such as treasury bills, arbitrage and mathematical applications. Index Options and Futures: This is a good section on how to trade index and future options and how to use them to hedge your portfolio.

Measuring and Trading Volatility: Volatility is a huge part of option trading. We believe it is the most important aspect of option trading and a clear understanding of volatility will make you a great option trader. Unfortunately Lawrence McMillan only touches on volatility but we have other books that dive deeper into that part. Still it is a good primer to get your feet wet and round out the understand of options. Options As A Strategic Investment aims to get you started in option trading. It spends the bulk of its pages focused on familiarizing you with the each of the option strategies and answering questions about those. It does a fantastic job at this part but fails to really deliver on the more advance topics like volatility and the Greeks. Option Volatility And Pricing by Sheldon Natenberg. After you have covered the basics its time to explore more advanced topics and the best introduction to those is through Option Volatility and Pricing . The quick description: You'll learn how professional option traders approach the market, including the trading strategies and risk management techniques necessary for success. You'll gain a fuller understanding of how theoretical pricing models work.

And, best of all, you'll learn how to apply the principles of option evaluation to create strategies that, given a trader's assessment of market conditions and trends, have the greatest chance of success. Option trading is both a science and an art. This book shows how to apply both to maximum effect. Sheldon Natenberg begins with the option pricing model and then moves into volatility and the Greeks. Volatility is a complicated topic and Natenberg provides a great start as he breaks it down into easy to understand principals. He also covers more into spreads and specifically into volatility spreads. A volatility spread is a spread that is delta-neutral, sensitive to changes in the price of the underlying, sensitive to changes in implied volatility and sensitive to the passage of time. The Option Trader's Hedge Fund by Mark Sebastian. Now that we've found the books we need for option basics and the more advanced topics lets drill down to some specifics. The Option Trader's Hedge Fund is a great book for running a short option portfolio. Don't let the title scare you away this is not geared towards hedge funds. The short description: In this book, a hedge fund manager and an option trading coach show you how to earn steady, reliable income selling options by managing your option trades and running your option portfolio as a real business with consistent, steady returns. Packed with real-world examples, the authors show you how to manage your own “one man” hedge fund and make consistent profits from selling options by applying the basic framework and fundamental business model and principles of an “insurance company”.

This framework helps you to apply your option trading method to a solid, predictable, business model with consistent returns. For someone who has some knowledge of trading options and wants to become a consistent income earner. Mark Sebastian details out the strategies used toe run a short option portfolio such as vertical spreads, iron condors, iron butterfly, time spreads and ratio spreads. He details out how to build a portfolio and run it like an insurance company (because selling option credit is like selling insurance). Packed with his experience from the trading floor you can see how market makers handle risk management, trade execution, and the Greeks. Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits by Dan Passarelli. If you are going to be an option trader you need to know your Greeks and there is no better book than Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits . The Greeks are going to tell you how your option price moves as the underlying moves (delta), passage of time (theta), volatility movement (vega) and the change in interest rates (rho). A quick description: The options market is always changing, and in order to keep up with it, you need the greeks—delta, gamma, theta, vega, and rho—which are the best techniques for valuing options and executing trades regardless of market conditions. In the Second Edition of Trading Options Greeks, veteran options trader Dan Pasarelli puts these tools in perspective by offering fresh insights on option trading and valuation. An essential guide for both professional and aspiring traders, this book explains the greeks in a straightforward and accessible style. It skillfully shows how they can be used to facilitate trading strategies that seek to profit from volatility, time decay, or changes in interest rates. Along the way, it makes use of new charts and examples, and discusses how the proper application of the greeks can lead to more accurate pricing and trading as well as alert you to a range of other opportunities.

Like Mark Sebastian, Dan Passarelli spent time on the floor so his experience comes as a market maker. Dan starts off with the Greek basics but quickly moves into more advanced topics such as spreads, volatility and actually using the Greeks in your trading. Options Trading: The Hidden Reality by Charles Cottle. Moving on with our advanced topics we are going right in with Options Trading: The Hidden Reality . We will be the first to admit that this book is going to be the more difficult one to get through. The writing will be harder to follow so a couple of passes through this book is necessary. However, we still recommend this book because it is going to cover a wider more abstract range of option topics. Charles deals with option synthetics, put-call parity, hybrid hedging and adjustments. The book teaches readers when an adjustment becomes necessary and which adjustment to go with. It helps to take the emotion out of trading and turn it into a more mechanical process. Bonus Book: Learn Options eBook (free) The Learn Options eBook is a great reference book to keep handy. Each option method is laid out in full detail. Now you can quickly turn the page and see the max profit, max loss, breakeven, margin requirements and profit and loss graph for each option method. It also talks briefly about the history of options so you have an idea of what you are working with and their origin.

The book also moves into the more advanced topics such as the Greeks and volatility. One key reference point is the Greek Cheat Sheet laid out towards the back of the book. This is a great reference to have because it list each option method and the Greeks associated with it and how they affect the position. What book has helped you with options? Let us know in the comments. Top 5 Option Trading Books (Plus A Bonus Book) The Best Option Play For Earnings. 7 Factors That Affect An Option's Price. How To Trade And Adjust An Iron Condor. 6 Ways To Adjust An Iron Condor. "Last year The Option Prophet absolutely transformed my trading account from one where monthly gains were often uncertain and unpredictable into one where a steady monthly income stream through OTM credit spreads bought amazingly steady and consistent growth ." All contents of the Site are provided for information and educational purposes only. You agree that the content of the Site should not be interpreted as investment advice, accounting or legal advice, as an endorsement of any company, security, fund, or as an offer to buy or sell any security. Trade Smart is not a registered broker dealer, or financial advisor. Trade Smart does not provide personal investment advice and Trade Smart does not represent itself as a qualified investment advisor or properly licensed party.

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When I am asked about what option trading books to read, it's complicated. With that in mind, here is my list of recommended trading books. Books on Options Trading. This is my "go-to" book for new option traders. Natenberg does a good job explaining option trading through the lens of volatility, which is a perspective many don't think about when they start to trade options. This also has the full listing of basic option strategies and management techniques associated with them. The Volatility Edge in Options Trading - Augen. Anything by Jeff Augen is worth a read. This particular text goes a bit more into the nasty bits of options trading-- namely defining volatility and managing trades. This goes a bit more into the quantitative side, which can be fun if you know your way around excel or R. Volatility Trading - Sinclair.

Are you ready to go way down the rabbit hole? Sinclair has a ton of heavy math, along with real-world examples. This book brings insight into how hedge funds and derivatives desks actually play the options market. There's a good chapter on how to properly plan your trades, and a surprising amount of insight into trading psychology. Options as a Strategic Investment - McMillan. This is the bible of options trading. It's tough to get through and sometimes sections won't apply to your trading style, but it's great to have on hand as a reference, especially if you have a longer term timeframe in mind. Options, Futures, and Other Derivatives - Hull. I didn't really want to put this one on the list because I don't think it serves traders very well. But since it's a required text for many college classes, it's good to know about it-- you will gain the perspective of all the MBAs you'll be trading against. Technical Analysis of Stock Trends - Edwards and Magee. Edwards and Magee is the definitive source for technical analysis. It goes beyond the pattern and explains the underlying supply and demand dynamics. This book is in its 8th edition, which shows you the staying power of the content.

Evidence Based Technical Analysis - Aronson. EBTA will take evrything you just learned with Edwards and Magee and tear it down. This book shows that there is a ton of pseudoscience attached to traditional technical analysis, and patterns don't always have a statistical edge. This book will teach you how to properly get an edge in the market. To be honest, I was really uncomfortable reading this book as I do incorporate TA into my trading-- if anything I now have a respect for when patterns fail. Trading and Exchanges - Harris. The amount of caffeine I needed to read this book could kill a small village in Bhutan. But this one you have to read if you are to understand how exchanges operate. If you trade at all in a shorter term timeframe this will give you insight not found in any other book about how the market operates. One Good Trade - Bella.

If you want to learn about the markets from the perspective of a prop firm, Bella will give you what you want. There is a ton of wisdom on these pages, and plenty of narratives to make this an easy read. There's very little information out there on the art of tape reading, and OGT will give you a rundown of how it works. Mind Over Markets - Dalton. I believe one of the most underutilized forms of analysis is market profile. It's a dark art, and there isn't much literature on it. But this book is a must read. It's a struggle to read at times but I often review chapters every so often to understand the short term market. Markets in Profile - Dalton. This is the second book you must read on Market Profile, and it's a little more up to date compared to MoM. There's a little more integration with newer behavioral finance stuff and neuroeconomics. Seriously, you must understand auction market theory if you want to learn to trade. Mastering the Trade - Carter.

The setups are a bit outdated, but this holds a special place with me as it first introduced me to derivatives trading. This has a little bit of everything, including some trading psych, analyzing the TICK, and dayswing trading setups. Trading Psychology Books. The Psychology of Trading - Dr. Brett. If you haven't read anything by Dr. Brett you are doing yourself a disservice. I love this book because the author comes from a background of Clinical Psychology focusing on high-performing individuals. The anecdotes easily crossover into the trading realm, and you can gain plenty of insights about yourself and your trader profile. The Daily Trading Coach - Dr. Brett. Treat this book like a daily devotional. Dr. Brett smartly broke up the book into 101 lessons. Read one lesson per day and see how you could implement it in your trading.

Continual, incremental self-improvement will do wonders for your performance. Trade Your Way to Financial Freedom - Tharp. If you ever wanted the best way to track your performance, you will learn it here. The book discusses the concept of "R-multiples," which I believe is critical for traders and investors to understand. Tharp focuses not on the individual setups but how to approach them from a risk-oriented approach. Trading in the Zone - Douglas. This one seems to always show up on lists. It's a great weekend read that can get you motivated to take on the market again, and how to get into the proper trading state. This book will tell you a ton of things that you already know but you need to hear anyways. If you have trouble defining and accepting risk, this book is for you. Letters from a Stoic - Seneca. A nervous, fatalistic, pessimistic personality is not the right kind of profile you want to have as a trader. These letters from Seneca taught me how to accept randomness, embrace risk, and focus on the things that are important in my life.

Books on Performance. The Talent Code - Coyle. A great way to get better at the markets is to see how others become great in other fields. There are a ton of parallels, and this book gives you the steps necessary to become great in a trade. In-depth practice, self-corrective mistakes, and proper coaching are the true keys to talent. Flow - Csikszentmihalyi. Have you ever felt joy while trading? You were fully immersed in the market and in a state called "Flow." This book goes into the psycholgoical components of flow and how to stay there longer. Being in "Flow" during trading significantly increases your performance. How Traders Acheive Creative Flow - Bigger. This book by Michael Bigger is what caused me to read "Flow" in the first place. It's a quick read and it goes over how to properly get into the mental state to develop as a trader.

As the title says, trading can be a very creative endeavor and this book will show you how. The Four Hour Work Week - Ferriss. I was a little hesitant to put this one on here. I'm a card carrying member of the Cult of Tim Ferriss, and I don't mind saying it. What's good about this book is that it focuses on elimination. 80% of your trading gains will come from 20% of your perceived market information. If you focus on that 20% and remove all the extraneous stuff. Top Ten Trading Books. I am a big fan of trading books. How big? I have read over 300 books related to the market, investing, and trading and reviewed almost all of them on Amazon. com. Some trading books have the ability to lay out the principles that lead to profitable trading while others are not written by traders, but instead only about trading by writers who never traded an option or future contract in their life and contain little value beyond basic facts.

Here are the top trading books that really changed my trading process from haphazard to the clear focus of profitability. These books could change everything for you as a trader. Some are classics and some are more modern but I believe they all stand the test of time in helping a trader on their path to profitability. Let me save new traders the task of reading hundreds of trading books looking for the pearls of wisdom and just direct you to where the gold actually is. I did a survey on social media to see what books helped traders make the most money in the markets and these ten books were the result of hundreds of votes. Here are ten of the top trading books ever written summarized in one sentence: #1 How to Make Money in Stocks: A Winning System in Good Times and Bad by William O'Neil: Buy only the best innovative growth stocks at the proper buy point out of price bases and let them run as far as they will go. #2 Reminiscences of a Stock Operator by Edwin Lefevre: It’s a bull market you know and the big money is made in holding good positions over the long term and not trying to trade inside the day to day noise. #3 Market Wizards, Interviews With Top Traders by Jack D. Schwager: Here are how the best money managers in the world make money, will you listen to them? #4 How I Made $2,000,000 in the Stock Market by Nicolas Darvas: Find the best stocks that are being accumulated in high volume near their all time highs once you find them add to the winners and cut the losers short and let them run as far as they will go. #5 Trend Following: Learn to Make Millions in Up or Down Markets by Michael Covel: Give up your opinions, forecasts, and fundamentals and use a robust system to trade the market trends by following the actual price action. #6: How to Trade In Stocks by Jesse Livermore: Trade the pure price action of the leading stocks as they go higher and higher understand that they do have normal pull back reactions but learn how to not be stopped out until they have ran their full course. #7 Trade Your Way to Financial Freedom by Van Tharp: Quit looking for the Holy Grail of trading and instead focus on developing a trading system that fits you and trade it while managing risk. #8 Trading for a Living: Psychology, Trading Tactics, Money Management by Alexander Elder: You must manage the three M’s of trading to be successful: manage the money, the mind, and the trading method to be profitable. #9 Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude by Mark Douglas: Trading is more of a mental game than a mathematical one and it takes faith in your system and yourself to give you the confidence to trade with discipline and mental control. #10 The Complete TurtleTrader: How 23 Novice Investors Became Overnight Millionaires by Michael Covel : Richard Dennis showed some everyday people how to become millionaires by trading his firm’s capital with a simple trend following methodology based on breakouts with a few filters while using risk management.

What's your favorite trading book? Leave a comment below. Best options trading book 2013 Helping Traders Thrive. Enroll in an eCourse today! October 27, 2012 by Steve. I have had many traders asking me for my top option book picks over the years so I thought it would be a great blog topic. In my journey through reading hundreds of trading books these are my favorite 10 that benefited me the most in my option education over the years. I picked books that will not insult your intelligence by being too basic nor melt your brain with over complexity> I think these option books are just right. (I have many more that bored me to tears or that you could tell the author was a writer not an actual option trader by over looking the realities of option trading). After looking through my home library these are my top 10 picks. Show Me Your Options! I wrote this book for the stock trader trying to transition over from trading stocks to options as smoothly as possible. The option lessons are imbedded in a story narrative on a social media platform. This is a great place to start learning option pricing structures and option strategies.

Get Rich With Options While the publisher chose an aggressive title for this book it does lay out four good option trading strategies. Selling puts on stocks that you want to own at lower prices anyway, option credit spreads, selling covered calls to create income on long term holdings, and my personal favorite: deep-in-the-money call options. Very few ever discuss the power of buying deep-in-the-money call options where you control the full upside of a stock for less risk and with far less capital. The Bible of Option Strategies This is the encyclopedia of option strategies. You get a description of each method along with specific metrics for each one and the steps in creating it, the rationale to trade it, if it is net debit or credit, the effect of time decay on the method, appropriate time period, selecting the right stocks and options, risk profile, the Greeks, the advantages and disadvantages and how to best exit the trade. This book is meant as a reference book but I read it through cover to cover. Trading Stock Options Complete reverse from the above book, this is like the Cliff’s Notes of complex trading strategies. The author shows how he used real option trades for big profits and also had trades that were smaller losses. He simplifies many strategies to make them understandable especially playing long strangles and straddles through earnings by betting on actual post earnings volatility being greater than the volatility that is priced in to the options through Vega. Trading On Corporate Earnings This is a great book on how to best play holding through earnings announcements by using options instead of stock.

The Option Traders Hedge Fund This book shows the reader how an actual hedge fund operates for profit using options to generate income much like an insurance company does by selling policies. Great analogy and interesting perspective. Generate Thousands In Cash on Your Stocks before buying or selling them This book is one of a kind in explaining how to generate income in selling options and also how to continually navigate option plays by adjusting positions by selling new options to offset current holdings. It is a different perspective and an interesting read. Options Trading: The Hidden Reality This book is like taking the red pill and entering option matrix but you have to be ready to understand it by fully grasping the option Greeks to fully appreciate it. The beauty of this book is how he explains the parallel risk structure of options that most never grasp. One example is that selling a covered call and selling a naked put is virtually the same thing. In both plays you receive a small premium for taking on the entire downside risk in the stock. Short Spider Straddles: A Winning Combination This book is a great example of a simple robust trading method that wins in the long run through selling premium on both the long and short sides of a trade and letting the efficiency of implied volatility work in the option sellers favor. This book shows the historical long term double digit returns. But, alas this is no Holy Grail it is a profitable system when actual volatility is not more than two times implied volatility and while the SPY ETF has slower move on a percentage basis in most market environments during higher market volatility this system will lose and with no hedges in place the losses could be substantial like Black Monday 1987, the Fall of 2008, and the day of the 2010 flash crash. $TOCK OPTION $ I actually wrote the foreward to this book. It is a great introduction on how to sell option premium for profit by using short strangles and managing the position if it does move against you. It is a great primer for those that want to be a high probability winning option seller. Search.

New Trader U Shop. New Trader Rich Trader: 2nd Edition. New Traders are greedy and have unrealistic expectations Rich Traders are realistic about their… $3.99 Kindle edition. Principles of Profitable Trading. Steve Burns: After a lifelong fascination with financial markets, Steve Burns started investing in 1993, and trading his own accounts in 1995. It was … Read More. Moving Averages 101. If you've been thinking about advertising on Twitter, Steve is your guy! With more than 70,000 dedicated followers, Steve has some of the highest … Read More. Options Trading Books.

The Bible of Options Strategies - Guy Cohen is the master when it comes to taming the complexities of options. From buying calls and puts to iron butterflies and condors, Guy explains these strategies in a clear and concise manner that options traders of any level can understand. His chapter on options and taxes is especially welcomed (and needed). The Bible of Options Trading Strategies is a straightforward, easy-to-use reference work that should occupy a space on any options trader's bookshelf. Options as a Strategic Investment - Reflecting today's market realities and the new innovative options products available, this fourth edition features an in-depth analysis of volatility and volatility trading updated information on all stock option strategies, reflecting recent market conditions buy and sell strategies for Long Term Equity Anticipation Securities (LEAPs) detailed guidance for investing in the growing field of structured products the latest developments in futures and futures options and the market impact of the most recent changes in the margin rules. Packed with graphs and charts to clarify profit and loss potential, margin requirements, and criteria for selection of a position, this classic remains an indispensable resource for investors determined to master the world of options--and profit. Trend Following - How did John W. Henry quietly become rich enough to buy the Boston Red Sox? How have traders like Keith Campbell, Bill Dunn, Jerry Parker, and Salem Abraham consistently generated immense wealth in bull and bear markets? The key is trend following -- the only method proven to consistently make money. Now, one of the field's leading experts pulls back the veil on trend following, showing how it works and how you can take advantage of it. Michael Covel reveals the "underground" network of little-known traders and hedge fund managers who've been using trend following for decades. He introduces its fundamental concepts and techniques, showing why market prices contain all the information investors need, and how to understand price movements well enough to profit from them. Using 100 pages of easy-to-understand charts from top trend followers, Covel proves the method works -- and shows why only a technical system based on following price trends can win over the long term.

Covel presents more than a decade's worth of data: information you'd otherwise pay a fortune to see presented this clearly. He also shows even more backtested trend following results, so you can gain even greater confidence in the method. Along the way, Covel thoroughly debunks misinformation and failed advice from pros who ought to know better. This timely book capitalizes on today's intense volatility and uncertainty to give investors what they're desperately searching for: a method that really works. Technical Analysis of the Financial Markets - This outstanding reference has already taught thousands of traders the concepts of technical analysis and their application in the futures and stock markets. Covering the latest developments in computer technology, technical tools, and indicators, the second edition features new material on candlestick charting, intermarket relationships, stocks and stock rotation, plus state-of-the-art examples and figures. From how to read charts to understanding indicators and the crucial role technical analysis plays in investing, readers gain a thorough and accessible overview of the field of technical analysis, with a special emphasis on futures markets. Revised and expanded for the demands of today's financial world, this book is essential reading for anyone interested in tracking and analyzing market behavior. Options Made Easy - Simply and clearly, the author reveals secrets of options trading that were formerly limited to elite professionals and exposes the dangerous myths that keep investors from profiting. As you set out on your options journey, you'll learn interactively through real-life examples, anecdotes, case studies, and pictures.

Guy Cohen is your friendly expert guide, helping you pick the right stocks, learn the right strategies, create the trading plans that work, and master the psychology of the winning trader. Master all the essentials and put them to work Options demystified so that you can get past the fear and start profiting! Learn the safest ways to trade options Identify high-probability trades that lead to consistent profits Design a winning Trading Plan and stick to it Understand your risk profile and discover exactly when to enter and exit your trades Choose the right stocks for maximum profit Screen for your best opportunities stocks that are moving or are about to move Discover the optimum strategies for you Match your trading strategies to your personal investment goals No bull! The realities and myths of the markets What you must know about fundamental and technical analysis The easy, plain-English guide to making consistent profits with options! Teaches all the essentials with real-life examples and crystal-clear explanations. No complicated math or confusing jargon: Learn visually with easy-to-understand pictures! Identify high-probability trades, and design a Trading Plan that works. Master practical, easy strategies for succeeding in any environment even bear markets. Updated for today's markets with even more dynamic graphics, intuitive explanations, and valuable information! For every investor interested in trading options. When you read this book, you'll be amazed how quickly you understand options and how quickly you can start profiting from them! Option Volatility & Pricing - One of the most widely read books among active option traders around the world, Option Volatility & Pricing has been completely updated to reflect the most current developments and trends in option products and trading strategies.

A Beginner's Guide to Short-Term Trading - "A Beginner's Guide to Short-term Trading" is written to those of you who want to profit by grabbing the "sweet spots" out of a stock's uptrend or downtrend. The book explains two styles of trading: swing trading and position trading. When you place a swing trade, you buy a stock with the intent of taking gains in 2 - 5 days. When you enter a position trade, you typically buy a stock breaking out of a base into an uptrend. You hold that position as long as the stock rises in that uptrend, approximately 3 - 6 weeks. If you have a have full-time job, yet want to participate in the stock market, short-term trading may appeal to you. And, if you're a traditional buy-and-hold investor, the knowledge you find in this book will help you keep your profits, instead of gaining them . . . and then giving them back. I wrote "A Beginner's Guide to Short-Term Trading" in the same lighthearted, reader-friendly style as my previous book, "A Beginner's Guide to Day Trading Online." Although the material is comprehensive and substantial, I firmly believe that humor, woven into a serious subject like the stock market, promotes the learning process. I also continued the "Center Points," as I've received a lot of positive feedback from people who enjoyed them in my last book.

"A Beginner's Guide to Short-Term Trading," is designed to teach you skills and strategies needed to enter the stock market on a relatively short-term basis, safely and successfully. Please educate yourself thoroughly before you jump into the market, just as you would do with any worthwhile endeavor. Futures & Options For Dummies - The days of buying and holding stocks and mutual funds for years are gone nowadays, futures and option markets offer some of the best opportunities to make money trading in volatile times. But like all investments, high risk is involved, and in order to become a successful trader you must be prepared to work as a geopolitical analyst, a money manager, and an expert in all types of commodity markets. Futures & Options For Dummies will show you how trading is done and how to survive and succeed in these ever-changing markets. Filled with nuts-and-bolts advice, you'll soon discover how to manage the risks involved and reap the rewards of futures and options trading. This straightforward guide gives you the tools you need to understand: Ins and outs of trading futures and options How to analyze the markets and develop strategies Interest-rate futures and speculating with currencies How to stock up on indexes The direction of commodity futures Organizing your financial data and calculating your worth Developing strategies now to avoid pain later The execution of successful trades Trading takes an iron-cast stomach and nerves of steel to perform, and this book features ways to keep yourself sane and secure. It also lists resourceful Web sites, commodity exchanges, books, newsletters, and magazines to assist in your trading endeavors. From technical analysis to finding a broker, Futures & Options For Dummies has all the information you need to capitalize on these markets! Option Trading Books Reading List. Best options trading book. What are Some Good Books on Option Selling?

What should you do if you are interesting in learning more about option selling? The best way to get started is to read a few good books on the subject. When I first got started I went to an expensive seminar. After two days I knew enough about options to be dangerous – to my myself. After trying to trade options based on what I had learned at the seminar I realized, after losing a lot of money, that there was more to it. So I started researching books on options, videos online, websites, etc. Here are some of the best books I found on options selling and trading in general. One of the most advertised books is The Complete Guide to Options Selling: How Selling Options Can Lead to Stellar Returns in Bull and Bear Markets by James Cordier and Michael Gross. It goes into detail about option writing strategies that can improve your profit. It reviews all of the basic mechanics of selling options and profiting as well as strategies that are insider-quality, easy to follow, and that have a high-probability approach. The book is written to appeal to the new investor, not a mathematician. In this book you can look forward to learning why selling options is more profitable than buying, and specific strategies for selecting various types of markets. Keep in mind that this book is about futures options, not equity options.

One of the first books I got was Options As A Strategic Investment by Lawrence Mcmillan. I would say this is the “bible” of options books. Why? Because it is huge and covers all the basics of option trading and then some. Most option books cover the basic strategies but they leave out when you should use these strategies and what to do when the trade goes bad. Very few books talk about adjusting trades. The best one I found that does is The Option Trader’s Handbook – Strategies and Trade Adjustments by George Jabbour and Philip Budwick. My favorite book on Option Selling is Generate Thousands In Cash On Your Stocks Before Buying or Selling Them , by Samir Elias. I myself have only used a couple chapters of this book but it was a very interesting with good ideas. Wall Street Money Machine by Wade Cook is also a good read. But read this book for motivation only.

Most of the examples and numbers in this book were over exaggerated but still, I liked it and enjoyed it when I was starting out so you might too. Most of the book was on covered calls. A couple other “should” read book on option volatility are Option Volatility and Pricing by Sheldon Natenberg, and The Volatility Edge in Options Trading by Jeff Augen. Both are technical and for advanced options traders. How To Trade In Stocks by Jesse Livermore is a must read. Livermore was the best stock trader of all time and his strategies are now copied by just about every firm on Wall Street. Trade Your Way To Financial Freedom by Van Tharp is good to give you some basic guidelines on trading. Trading For A Living by Alexander Elder is also very good. I have all of Elder’s books even though they focus a lot on technical investing, he does show how traders with different styles can all make money if they get the basics right. I read through The Complete Guild to Option Selling back a few months ago when I started as a member of this service. One concept I learned and felt impressed from the book is to sell FAR-OUT-OF MONEY spreads which actually do not need fancy and complicated techniques.

Now, the trick is how far we should look at them in terms of striking prices, especially in OG’s SPX and RUT short condor spread trades? If we initially sell two strikes out than OG suggests, we are “safer”,but a lot less ROI. let’s say 15% ROI for OG , but 8% for two more strikes out ( for instance, OG sold a credit of 1.45,and we got 0.80,).For good and safer incomes, members and OG may have more discussions about the topic. Risk and reward comparisons always are psychological. Chasing for higher returns or for lower, but sustainable returns for long term ? That’s a great point. I know a fellow trader who likes to do condors but wants a 90% probability of profit. That provides very little premium and his returns are about half of mine. But he also has to adjust his trades less than I do. He prefers not having to mess with his trades once he puts them on. I don’t mind adjusting every other month or so for a higher return. It is a personal choice. This is a great list of options trading books. Your note about McMillan’s book is right on (you mention Options as a Strategic Investment – McMillan on Options is another great example of his work). The only thing that surprised me? You mention Wade Cook’s Wall Street Money Machine without gagging.

🙂 It sure is a motivational book (even more so if you get a copy with the audio CD, where he gets his broker on the line and initiates several trades in front of a live crowd), but it was only germane during the crazy late 90s. The claims and his thought process could get many beginning traders into trouble in today’s market. Outside of that – great list. Every trader should read the books you mention. Timothy (Timorous) McCready. Yeah the Wade Cook book has very few facts in it that are totally accurate. While the claims are totally outrageous, the style is simple and easy to understand. FYI, defiant Wade Cook is due to get out of jail in Portland Oregon sometime in 2014 (for tax evasion, fraudulently selling unregistered securities, conducting illegal enterprises, and lying under oath.) As bad as it is, Wade Cook made me so much money from $3k to $190K during the late 90’s. with no experience(just read his books and follow it verbatum. My heart goes to him.

My trouble begins when I start attending expensive sexy seminars, Now I’m a consistent credit spread writer. My favourite options trading book is. Options, Futures, and Other Derivatives and DerivaGem. It’s not cheap but money well spent. Leave a Comment Cancel Reply. Free 9 Lesson Course: How to be profitable no matter which way the market moves: Up, Down, or Sideways.