Options trading is an exciting yet complex avenue within the financial world. With its unique terminology and strategies, it might seem daunting for beginners. The good news is that there are several educational resources to guide those new to the field, especially books written by industry experts. Let’s explore some of the top books that every new options trader should read to help them master the techniques required for successful options trading.
The Complete Guide to Option Selling by James Cordier
If you are interested in selling options, then James Cordier’s Complete Guide to Option Selling is a must-read. Unlike many other books that cover a broad spectrum of strategies, Cordier’s work is solely dedicated to option selling. He breaks this unique method down, explaining both the benefits and potential pitfalls, offering a full picture of what option selling entails. You can also expect:
- Practical insights and real-world examples: As a seasoned options trader, Cordier doesn’t just talk about theory in this book. He shares real-world examples and experiences. Plus, he offers practical insights and tips into constructing and managing an option selling portfolio, demonstrating how it’s done in the actual trading world.
- Simplicity for beginners: This book can be particularly appealing to beginners, as the concept of option selling is presented in an easy-to-understand manner. Complex topics are explained using simple language, making it an accessible read for those new to the field.
Options as a Strategic Investment by Lawrence G. McMillan
Options as a Strategic Investment is often regarded as the Bible of options trading. McMillan’s work has served as a cornerstone for many traders, both novice and professional. From basic concepts to advanced techniques, McMillan leaves no stone unturned. He dives into various options, including stock index options, futures options, and much more. Here’s what you can expect from this essential book:
- Theoretical insight and practical application: This book expertly bridges the gap between theory and practice. Concepts aren’t merely explained, but it also teaches you how to apply them in real trading scenarios.
- Clear language and structured approach: While the content of the book is dense, McMillan’s writing style is clear and well-organized. It begins with the fundamentals and gradually builds towards more complex topics, ensuring a smooth learning curve for readers.
Option Volatility and Pricing by Sheldon Natenberg
Sheldon Natenberg’s Option Volatility and Pricing is a book that stands out among options trading literature. Focusing on the interplay between volatility and pricing in options trading, it’s an invaluable resource for traders who want to understand these intricate concepts. Some of the main things to like about this book include:
- Comprehensive yet understandable: This book covers a broad range of topics related to volatility, from basic concepts to advanced trading strategies. With a simple writing style and approach, these complex topics are made understandable even for those new to trading.
- Practical strategies and tools: The theories behind volatility aren’t just explained in this book; actionable strategies and practical tools are also provided. Specific trading strategies that rely on understanding volatility are explained in detail, allowing readers to easily implement what they learn.
Whether you are just beginning your journey or looking to refine your skills, these three books offer a wealth of knowledge tailored to different aspects and levels of options trading.