It can be overwhelming to know where to start.
I have two recommendations that I think will be more than sufficient to not only get you started, but carry you for quite some time. Options trading can be as simple - or as complicated - as you want to make it. If your goal is to be a successful trader, there's no need to make it complicated; the market doesn't reward complexity, nor does it care how smart you think you are. That said, if you're a bit of a trading geek like myself, reading about, and understanding, some of the deeper nuances of options trading is "fun". These books will keep you busy.
1. Option Volatility & Pricing, by Sheldon Natenberg. This is a comprehensive, and I'll be frank, somewhat dry read. Even for me. That said, I've highlighted half the book, and have page markers and post-it notes throughout it. It's a valuable book in my library, and I think of it as a textbook. There are 18 chapters covering everything from the basics of what an option is, to theoretical pricing models, to trading strategies. Odds are, you won't read the entire book, as it won't all be of interest to you (are you really going to be trading intermarket volatility spreads? And do you see yourself putting on a jelly roll anytime soon? - and yes, that's really a thing; page 231.). That said, the book is loaded with examples and is nothing if not thorough.
2. Your Options Handbook, by Jared A. Levy. This is probably my favorite options book. It's well written, meaning it doesn't come off as a textbook, and it engages the reader. There are 11 well thought-out chapters, starting with Market Basics and Market Mechanics, which if you think about it, is a pretty logical place for an options book to begin. Huh. It breaks down trading strategies from the basic, to the slightly more complicated, to advanced, to advance advanced (I just made that term up, as it seems appropriate). But it also offers up worthwhile advice on other aspects of trading as well, such as "Top 10 things professionals do that the average retail investor doesn't"; lessons that will serve traders well in all aspects of their trading, not just in options. And again, there are examples on everything throughout the book. It also goes into the topic of Risk and Money Management, which I think is paramount - something every book on trading should pay homage to. There's a section on Trading Tactics, where the subject heading is, "Take Kibbles and Bits, Not The Whole Pie". That gives you a feel for the style here.
0 Comments