Buy it on Amazon. Best options trading book - Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks, by W. Edward Olmstead 2nd Edition Whether you're new to options or only want to understand them more fully now that you've begun trading, Options for the Beginner and Beyond packs a college level options trading course into pages of solid fundamentals and the most popular options trading strategies.
Divided into three sections—fundamentals, trading strategies, and advanced topics such as delta-neutral trading, implied volatility, and the Black-Scholes Formula—the book will benefit newcomers by showing them how to augment an investment portfolio with selective options trades.
Advanced readers will get solid advice on using the various trading tactics such as spreads, straddles, collars, and condors. For sophisticated traders, the author discusses specialized topics that include the effects of volatility, put-call ratios, and the theory of Maximum Pain on options pricing and profit potential. Written in a down-to-earth style that eases reader apprehension about studying such a complex topic, Options for the Beginner and Beyond will give you the tools and fundamentals you need to succeed in trading options.
Yet he writes in a conversational style that engages the reader and makes a complicated subject relatively easy to understand. The book is comprehensive in scope and covers the basics plus all the most popular trade types. No specific trading methods are presented, so readers will be left to develop their own options trading strategies.
This is a negative since knowing all the possible trades but not knowing the proper times to use each trade leaves the reader no better off and perhaps even more confused about how and when to employ each specific strategy.
Still, the book is comprehensive enough and well written enough to warrant inclusion on a new investor's reading list.
Best options trading book - The Rookie's Guide to Options: Wolfinger Updated and expanded to reflect changes since the Great Recession of , this best-selling book shows readers how to reduce risk and increase profits by trading stock options. Wolfinger uses a unique approach to options that takes readers inside a trader's mind with regard to when to buy and sell and how to manage risk.
Each chapter is written like a lesson with a quiz at the end. Readers will come away confident in their ability to trade if they've passed all the quizzes and are able to manage risk as well as their emotions. Since this book focuses only on equity options, it is quite comprehensive and gives the reader a deep understanding of how to utilize stock-specific strategies such as covered calls and writing cash-secured puts. Since naked options trading isn't discussed other than the very conservative strategy of writing cash-secured puts, this book doesn't claim to guarantee the reader will get rich quickly.
This is a positive since options trading is often described as highly speculative as well as lucrative. True, astonishing gains and losses are often seen trading options, but often those returns are usually on small amounts of capital since the basic purpose of most options trades are to hedge risk or minimize losses. The author stresses low-risk, high-probability options trades that help a trader grow a portfolio slowly and steadily with minimal volatility.
The appendix contains useful information on option symbology, how options are treated after stock splits, stock volatility, and an easily read glossary.
The Rookie's Guide to Options is worth a read to investors who desire to learn conservative income-producing strategies for trading options. Best options trading book - Understanding Options 2nd Edition, by Michael Sincere A bestselling introductory book on options, the updated second edition of Understanding Options covers the basics in an accessible, easy-to-read style, and provides new charts and data, expanded coverage of collars, credit and debit spreads, mini-options, the Greeks, and protective puts.
The book also takes a critical look at trading ETF options and contains a new section on the strategies used by master options traders. The basics start with defining options and opening an account. From there, Michael Sincere takes the reader through the process of understanding a particular options strategy, then choosing the right option s , executing the trade, managing the position, and closing the trade. Sincere writes clearly, and his explanation of the more complex options strategies is easy to grasp the first time through.
Of course, an introductory book will not suit sophisticated investors looking for intricate options strategies for complex trading situations. Sincere doesn't dwell much on Condors, Butterflies, Strangles, or Straddles, so readers looking for more than good instruction on simpler trades like spreads and covered writing will be disappointed.
The Greeks are only given cursory coverage too. Newcomers looking to understand what they may have read online or seen on business television about Delta, Theta, Gamma, etc. Overall, Understanding Options makes a great first book on options with the caveat that a beginner will want to read other books to obtain a complete basic understanding of the complex subject of options trading.