Best Books for Options Trading

The following are the best books that Shape up ‘Option Traders’ as Better Performers.

A highly seasoned stock player does opt for option trading making a tremendous impact on exchanges.

The following lines give a gist of information on leading books written by options trading experts. They are Lawrence G. MaMillan and Sheldon Natenberg.

1. Options as a Strategic Investment Written by Lawrence G McMillan

Options as a Strategic Investment written by Lawrence G McMillan helps an investor to explore practical trading strategies. Through this book, investors can understand the methods to minimize risk and maximize profit potential. The book is a composite format of information covering over and above 1000 pages.

You Can Learn:

Options trading involves strategic techniques such as iron condor spreads, back spreads, dual calendar spreads wide, put ratio spreads, and synthetic straddles.

The book describes specific option strategies to be employed under specific circumstances in the stock markets.

The author provides a better insight into trading index options, trading options on futures, and measuring market volatility.

Investors traders holding non-equity options and listed options in stock markets can gain wealth by employing strategic opportunities for managing investments.

The book helps investors to follow the in-depth discussion that speaks about the list of volatility derivatives, futures, and options.

An investor will be required to implement broad-based index put options or volatility call options by not compromising on losing any portfolio. The practical examples do cite the protection techniques to minimize the losses.

An investor can update oneself through the current option symbology as explained with examples and tables in an effective manner. Further, the book defines the weekly options, portfolio margin, decimalization of prices, and the instances where the commission rates are lowered.

Note:

In the revised fifth edition, you can experience the business-tested tactics for making investments in new options and products available in the stock markets.

The information deals with the tax laws on the option trading profits or losses.

2. Option Volatility and Pricing by Sheldon Natenberg

The ‘Option Volatility and Pricing’ book is a must-read by option traders across the globe and its author Sheldon Natenberg provides an update on strategic trading developments. It discusses in detail the option products and newer evolving trading strategies.

Basically, options traders’ job is to find an edge and control the impending risk. The fundamental work involved in an option trader’s job is to realize and monetize the edge in stock markets.

Volatility ise a vital elemnt in deciding on option pricing and decay.

Option is a tool for leveraging the volatility ( fluctuations) in price moving in the upward and downward direction of the underlying asset such as equity, bonds, commodity markets, etc.

The author described the implied volatility relative to its percentile and mean reversion as a significant property of volatility.

In his book, he detailed the ‘Garch model’ that incorporates mean reversion and volatility extremes.

Natenburg explains the risk factors when trading options.

They are stock direction (delta), moment speed (gamma), volatility (vega), time decay (theta), interest rate, margin, dividend (rho), and in addition the multitude of trading strategies.