Options trading is a lot more complicated than stock trading. But, though intimidating, there are books that can help you make the most of this potentially life-changing investment strategy. Here’s our review of some of those.
- 1. Options as a Strategic Investment
- 2. Trading Options for Dummies
- 3. Option Volatility & Pricing
- 4. Trading Option Greeks
- 5. Options Trading Crash Course for Beginners
- 6. The Options Playbook
- 7. Option Trading in your Spare Time
- 8. Fundamentals of Futures & Options Market
- 9. The Option Trader’s Hedge Fund
- 10. Binary Options Trading
- Final Words
1. Options as a Strategic Investment
This bestseller by Lawrence G. McMillan is regarded as one of the most reliable sources of information on anything related to the options market. The guide provides you with details on the fundamentals of making calls especially out-of-the-money calls.
Besides that, “Options as a Strategic Investment” provides introductory lessons for newcomers. For example, it teaches you how to use options as a hedge and also how to deal with market volatility.
However, at over 1,000 pages in length, this isn’t the kind of stuff to go for if you’re looking for beach reading material.
On a positive note, though, each paragraph of this guide is written in an engaging manner for easy digestion.
2. Trading Options for Dummies
Lawrence G. Mcmillan’s book might be good for all levels of learning but if you’re specifically looking for a guide that introduces you to the A to Z of options trading, “Trading Options for Dummies” is your best bet.
Authored by Joe Duarte, MD, this guide captures the basics. For instance, it talks about how to understand the art of buying and selling options. It also talks about how to determine and manage risk.
Yet another wonderful aspect of it is that it educates you on how to capitalize on sideways movements. Indeed, Duarte, a former money manager, has a lot in store of newbies looking to learn the ropes.
3. Option Volatility & Pricing
This is one of the most popularly used books out there. It’s particularly used for training new traders in top-tier financial firms around the globe.
One thing we absolutely love about this guide is that it brings you up to speed with Sheldon Natenberg’s expertise in option theory foundation, risk analysis, and option pricing models.
But who is Sheldon? Well, he’s an independent floor trader who trades at the Chicago Board of Options. The fact that he’s independent makes him one of the most reliable sources of information out there currently.
4. Trading Option Greeks
It’s not mandatory to understand option Greeks if you want to get started in the game but understanding them can give you an upper hand in investments. That’s why we think that this book by Dan Passarelli is such a good guide.
Within it are option Greeks techniques among them rho, vega, theta, delta, and gamma. Indeed, Dan goes ahead and explains these factors using very simple terms.
It’s no wonder this book is ranked among the most basic guides for aspiring traders and experienced ones alike. But because it covers quite some technical detail, we think that seasoned traders would be the ones to benefit the most from it.
5. Options Trading Crash Course for Beginners
Are you just getting started in options trading? Chances are that you don’t have much time to learn the complicated lingo that comes with it. But what if you could take a crash course by one of the leading trainers out there i.e. Frank Richmond?
The icing on the cake is that this book is an 82-page one. So, you can easily peruse it in a few short days. Plus, we like the fact that the author has used easy-to-understand language.
And since this is a crash course, it means you can start making some returns quite fast if you heed Richmond’s advice.
6. The Options Playbook
One thing that stands out about this guide is that it not only offers practical advice for investors but also pointers for anyone looking to add variety to their trading strategy. Indeed, this course brings you up to speed with more than 40 options trading strategies.
What’s more? Each one of those strategies is categorized as either bearish, bullish or neutral. And that way, you can easily determine if it meets your risk appetite or not.
7. Option Trading in your Spare Time
This affordably priced guide seems written with women in mind. With the debate about the gender pay gap raging, women have come out as earning less than their male counterparts. Also, women are naturally forced to spend a lot of time away from work taking care of their children.
With all those constraints in mind, this book by Kirkland and McCullough aims to empower women with the knowledge of options trading. And one thing we like about it is that it provides tips that can even be used by anyone with limited financial resources.
8. Fundamentals of Futures & Options Market
John C. Hull is a professor of Derivatives and Risk Management. The 73-year-old is indeed armed with the essential skills needed to trade profitably in the long-term. This is clear from his book “Fundamentals of Futures & Options Market”.
The guide provides you with a clear understanding of the futures markets. It also contains actionable tips and tidbits on swaps among other derivative instruments. And to top it all up, you’ll find its coverage of futures trading quite eye-opening.
9. The Option Trader’s Hedge Fund
Co-authored by an options trading coach and a hedge fund manager, this guide is all set for the learner who wants to learn on-the-go. The authors educate you on how to build a steady income stream by selling options. This is done within paragraphs of content packed with real-world examples.
We also like the fact that this book is quite written and clear in guidance. It, therefore, helps beginners avoid the common pitfalls of novice options trading.
On the flip side, though, if you’re a seasoned investor, chances are that you’ll notice that this book doesn’t give all the details. You’d probably need to check the internet for some of that as you read the book.
10. Binary Options Trading
Within this publication is a rarely-talked-about options strategy that uses a simple precept. Indeed, this guide entails analyzing whether different assets rise or fall above certain price points. That might sound quite basic for now, but once you get your hands on this book, you’ll begin to realize just how much value you’ve been missing all along.
John Reigner published this book in 2019 with the sole objective of providing upcoming options traders with updated information on binary options trading strategies. The book clearly lives up to expectations as it goes well beyond the basics to provide practical strategies for traders.
Attempting to trade options without enough reading is similar to making shots in the dark. Wise traders know all too well the importance of constantly updating their skills. And indeed, we hope that from the selection of 10 books reviewed above, you’ll be able to find one or two that can help you become an even better investor.
Blake is a self-made online day trader with a knack for adventure. On his free time, he loves reading and learning new methods in the trading as well as improving his jiu-jitsu skills. He currently resides in New York City.