It’s easy to be scared of options trading, but it can be an important part of a well-balanced fund. But first, an option gives an investor the chance to buy an asset at a certain price and on a certain date. It doesn’t make them do it. Options can be good for investors because they aren’t very risky if they’re used correctly. But many investors don’t think about options trading because they are so busy. When one survey looked at people, only 18 percent of them said that they often bought and sold stocks and other options.
We’ve chosen the best books on options trading to help you learn more about the subject.
Best Overall: Options Trading Crash Course
It’s a good idea to read Frank Richmond’s “Options Trading Crash Course” to learn everything you need to know about the options market. He talks about different types of trades, how to maximize your profits, and how to find good investments. For people who are new to options trading, this book has a lot of important words and phrases. It also doesn’t use a lot of words and has a clear way to make money. Everyone wants that, right? “Exposing Blockchain” and “Forex Trading.” Richmond is also the author of these two books.
Best on Strategy: The Options Playbook
It’s good for investors who already know about the options market but want to improve their investing strategy. Brian Overby’s “The Options Playbook” lists the 40 most popular options strategies and gives detailed instructions on how to do them. Overby talks about everything from why implied volatility is important to pricing variables, or Greeks, to how time decay affects implied volatility and how it changes. This person at Ally Invest, called Overby, is a senior options analyst and works there.
Best for Strategic Thinkers: Options as a Strategic Investment
Lawrence McMillan’s best-selling book, “Options as a Strategic Investment,” is now in its fifth edition. It’s great for people who already know a lot about the options market. As a result, it gives an in-depth look at the different options trading strategies that people can use. The options market has a lot of new, proven tools that can help you make more money and lessen your risk. These tools include strategies for buying and selling Long Term Equity Anticipation Securities (LEAPS), neutral trading, investing in Preferred Equity Redemption Cumulative Stocks (PERCS), and futures and futures options. It’s not just options that McMillan has written about. He has also written “McMillan on Options” and “Profit With Options,” and he writes the Daily Volume Alerts service.
Best for Advanced Traders: Option Volatility and Pricing
People in the field often make Sheldon Natenberg’s “Option Volatility and Pricing” mandatory reading. It’s a good choice for both amateur and professional traders who want to make money in the options market. If you want to learn about both strategy and risk management, this second edition is for you. It includes important information on option theory, dynamic hedging, volatility, risk analysis, position management, stock index futures and options, and more. Natenberg used to be a trader, an author, and an options lecturer. He’s also a member of the education team at Chicago Trading Company, which helps people learn about trading.
Best for Professionals: The Option Trader’s Hedge Fund
A free book for you thanks to Barnes and Noble
“The Option Trader’s Hedge Fund” teaches people how to trade options like a business, by setting up a steady source of income from options trading. Authors Mark Sebastian and Dennis Chen talk about how to start a business, how to set up different sources of income, and how to deal with problems and pitfalls. They also share their own personal experiences, which they’ve gained over many years of work. It’s Sebastian’s job to run Option Pit Mentoring and Consulting. Chen is the founder and chief investment officer of Smart Income Partners, and they work together.
Best for Beginners: Trading Options for Dummies
The reason this pick made our top 10 list is because it focuses on the basics when it comes to any subject. In this case, it focuses on the options market. When you read “Trading Options for Dummies,” you will learn how to choose the right options for your portfolio, how to protect your investments from a downturn in the market and even how to get more money out of your investments without having to sell. In the past, Joe Duarte was a biotech analyst and wrote the “This Week in the Money” column.
Best Quick Read: The Short Book on Options
if you only read one book about options trading, let it be this one. Mark Wolfinger’s “The Short Book on Options” talks about more than just the basics of options trading. It talks about how to use this part of the market with as little risk as possible. It’s a quick read that has a lot of useful ideas.
Wolfinger used to be a market maker. He is the author of three options books and runs Options for Rookies.
Best for Retirees: Covered Calls for Beginners
“Covered Calls for Beginners” by Freeman Publications thinks of options trading as a way to get “rental income” from the stocks you already own. Is this confusing? If you want to learn more about the options market and covered calls, this pick is for you. It explains everything from the difference between covered and uncovered calls to why you should avoid an IRA when writing covered calls, as well as simple ways to choose the right strike price. It also explains why options trading might be a great hobby for people who are retiring. Yes, that’s true.
If you want to learn how to trade options without using complicated words, Frank Richmond’s “Options Trading Crash Course” is the best place to start, because it covers everything from the different types of trades to the best strategies for getting the most money out of your trades.