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Best Books on Options Trading

Best Books on Options Trading

Options trading is a complex trading style where traders go for the best books on options trading to enjoy maximum profits. It is a strategic investment to develop a portfolio and is a derivative product.

Traders and investors can speculate or hedge against the underlying asset’s market volatility. Traders go for such types of investments to have simultaneous trading with the call and put options.

But, as the strategy is derivative and requires huge funds to trade with good market conditions and knowledge of the options trading. It becomes important for the options trader’s to understand it before going live.

For this purpose, we have discussed the best books on options trading and what qualities these books cater to in the market. This will guide the traders and market investors to analyze the trade and make good profits out of their investments.

Best Books on Options Trading

The financial market is full of opportunities when traders have the ability to realize them quickly and make the most beneficial use of them. However, traders hardly have the quality due to a lack of trade knowledge which calls for the best books available in the market.

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The same applies to options trading, and traders, to improve their understanding of the trade, go for the best books on options trading.

We have discussed the 9 most relevant options trading books that users can rely on to enhance their options trading wisdom. So, let’s drive-in and look at the books that traders and investors can select for profitable trading.

Best Books on Options Trading: Options as a Strategic Investment

The first choice in options trading books is options as a strategic investment by Lawrence McMillan. The book is considered as the bible of options trading, published in the 1980s. It offers the readers practical options trading strategies.

Traders can have the tested tools and strategies that would improve their earning potential with a comprehensive analysis of the options trading. A quick crash course that readers or options traders can afford.

The book includes the following:

  • Buy and sell options trading strategies for long term equity anticipation securities
  • Neutral trading analysis and how it operates
  • How to trade options and options trader’s hedge fund management
  • Overview of futures and options markets
  • Option trading strategies

Thus, a must-have book and first in the list of best books on options trading is options as a strategic investment.

Options Trading Crash Course

The options trading book was written by Frank Richmond and was originally published in 2017 and since then, has been updated with time. The book covers options trading to give a comprehensive view of the options market.

The options trading crash course includes trading options, strategies, option volatility, and advanced options trading. Traders or investors can go for the book to maximize the returns and be updated with the market conditions.

The book is good for beginners and experts as it has key definitions for the words that are necessary for options trading and that too with a clear path to profits.

The author of the book is a famous book writer for other financial markets as well. The options trading crash course will certainly support traders make good investments and decisions to earn profits.

Option Volatility and Pricing

Option volatility and pricing is the third best book on options trading and makes a good choice for traders. The options trading book was written by Sheldon Natenberg in 1988 and is highly popular among traders for options trading.

The options trading market is a derivative market and with market volatility impacting trading, price of instruments invested, and other pricing factors. Therefore, it becomes important for traders to polish their knowledge with the best books on options trading.

The book is suitable for novice and professional traders who look to become successful options traders. The book covers theories, risk management, hedging, futures and options trading, etc., to support traders making good profits.

Even the author of the book is a well-experienced trader, thus sharing his thoughts and helping other trading options have a better chance of making money.

The Option Trader’s Hedge Fund

Dennis A. Chen and Mark Sebastian are the authors of the book, The option trader’s hedge fund. The book was published in 2017, and the writers of the book are hedge fund managers, investors, management advisors, and entrepreneurs.

With such trading knowledge and being the market experts, they have managed to cover all the factors relating to options trading. The book discusses how underlying assets could be traded with options trading, options strategies, risk tolerance, options trader’s hedge fund, and other pricing factors.

It is an easy-to-understand guide that offers a business model to earn consistent income from options trading. Moreover, it has step-by-step guidance on the short option investment portfolio and generates steady income from writing or selling options.

Traders can easily understand the key concepts of options trading with option pricing and successful trader experiences.

Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits

Dan Passarelli is the author of the book Trading Options Greeks, written in 2008. The best books on options trading are incomplete without mentioning this book that covers the options market and trading.

Understanding options greeks is not always necessary for traders, but if they are aware of it, they can have a leg up in market analysis and investments. The book covers a new method of trading options and their valuation.

The factors discussed in the book are:

  • Delta, which is the option price movement in relation to the underlying assets
  • Theta is for the time value of options trading
  • Vega, for the volatility related option price changes
  • Rho is the change in options price movement due to risk-free interest rate, commonly equated with yields on the US treasury bills

The book discusses the impact of these factors on options trading, options values, and strategies. Therefore, it is among the best books on options trading.

Covered Calls for Beginners

The covered calls for beginners are the best options for trading books for retirees. It is a Freeman Publications book that considered options trading as collecting the rental income from the underlying assets already owned.

It is the fifth book in the list of best books on options trading and covers all the aspects of options trading. Options traders can use the book to understand the market, calls, option trading strategies, the difference between covered and uncovered calls, and why IRA should be avoided.

Other than this, the book has simple strategies for options traders and why the trading style is best for retired traders or users.

Thus, the best book for advanced traders as it has best practices for options trading.

The Options Playbook

The options market is volatile trading and needs good knowledge and practice for favorable results. The options playbook by Brian Overby, written in 2007, is for the options traders who are already aware of the options market.

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But, they want to improve their options trading strategy; the book has 40 most relevant and popular option trading strategies with a step-by-step guide to execute them. In addition, it covers many other advanced concepts of the options markets.

Traders can know the greeks, options trading process, why volatility matters, pricing variables, or other significant market terms necessary for profitable trading.

In short, the book explains the following:

  • Trade execution at the right time
  • Break-even at expiration
  • How market conditions impact options price
  • Recovering from unexpected conditions

Trading Options for Dummies

The book is a must in the list as it has the basic concepts of options trading, which are essential for traders to know and apply in the trade. One cannot move ahead without knowing what makes the options trading strategy.

Written by Joe Duarte in 2015, the book is all about the ins and outs of the options market. Traders can read the book to clear their basics and choose the right options for their portfolio development.

In addition, it takes into account the options strategies to protect investments from declining in the market and increase market returns. Consequently, it focuses on the given points:

  • Understanding buying and selling options
  • Determine and manage risks
  • Capitalize on sideways movements
  • Portfolio management

Fundamentals of Futures and Options Markets

John C. Hull wrote the book in 2001. The book says that options trading is popular with the regular market traders of futures markets. Therefore, the book is a comparison of the futures, options, and other derivatives of the financial market.

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Traders can have a good understanding of the futures and options markets. With this, the book also analyses the futures and risk management of the trades as the author has been a consultant for many known investment banking firms.

The book, therefore, is based on the real-life examples and experiences of the author. It makes trading in the derivatives easy with various options trading strategies and other profitable trading strategies.

Overall an excellent book for option and futures traders to make investments and earn high profits.

Conclusion

Best books on options trading is an important topic for beginners and experts of the market to know the basics of the trade along with being updated with the market trading style. The article has listed the best available books like option trader’s hedge fund, options as a strategic investment, etc.

These will guide traders in understanding the options markets and having profitable trading strategies to earn profits. Other than these, traders or investors can also rely on the educational material offered by brokers like InvestBy, Capitalix, and InvestFW, which would support good trading experience with knowledge enhancement.

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Karla brings over 16+ years of experience in the online brokerage industry. She is a finance graduate from Birmingham University, UK, and a forex market enthusiast. Being a true writing fanatic, she pens research-backed reviews for traders to analyse trading strategies and indicators. She has also authored a wide range of educational articles covering the forex industry. Karla is quite interested in checking brokerage companies and studying their performance and growth. Her aim is to describe complex investment mechanisms in an accessible way for traders of any level. Apart from finance, her interests mainly include reading books, fitness, and writing in her journal. Karla believes in the power of writing and wants to write for every layman who knows nothing about finance.
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