As requested by some of you, here you have my list of the best options trading books. This is a good way to learn options trading. Especially its basics. But, if you want to reduce your learning curve, it is better to join a trading community or if you are more confident to learn proven options strategies.
Fortunately for options traders, there are many fantastic books on options trading to choose from which I can suggest and help you become a more knowledgeable and well-researched investor.
Here is my list of the best 6 books on options trading. There would be others, but for me, these ones are key to having a look at. You can get them at your preferred online library.
But, as I already told you, to learn options trading in a profitable way it is better to learn proven options strategies. These books will help you to consolidate your theoretical knowledge. Do not give you insights on how to trade profitably.
1. Trading Options For Dummies by Joe Duarte
Everyone has to start somewhere, and, for individuals interested in options trading, Trading Options for Dummies is the perfect book to learn the basic principles and strategies of the practice.
Joe Duarte is a former money manager, active private investor, and financial writer who uses his experience and knowledge to provide first-time options traders with a wealth of information to help them become more successful. Duarte will show you:
Even if you’re an experienced trader you can pick up tips on using options with indexes, equities and ETFs. One of the top books on options trading.
2. Options as a Strategic Investment by Lawrence G. McMillan
In Options as a Strategic Investment, professional trader and author Lawrence G. McMillan shows how you can improve the earnings potential of your portfolio while minimizing risk.
This book provides novice and experienced investors with strong foundations in the properties and advantages of listed and non-equity options. With detailed explanations of techniques, buy and sell strategies, and in-depth analysis, this guide is sure to help you become a more successful investor.
Written for people with some familiarity with options, the author goes into detail of how the strategies are used in various situations, as well as why. The 5th edition was updated in 2012 and provides additional study guides and quizzes.
3. Option Volatility and Pricing by Sheldon Natenberg
At financial firms around the world, Option Volatility and Pricing by Sheldon Natenberg is used to educate new traders on the trading and risk management strategies necessary in order to become a successful options trader. This book is for the more advanced trader and is a must when you increase your options knowledge. One of the most recommended books on options trading.
In this book, Natenberg applies his incredible expertise in order to help new and advanced investors understand a variety of options trading principles, such as:
Option theory foundations
Risk analysis
Volatility contracts
Stock index futures and options
Option pricing models
In addition to the many other topics discussed in this book, these principles will help you become the knowledgeable options trader that you aspire to be.
While the book’s most recent publication was in 1994, the book still applies to today’s market. The book is geared more towards experienced options traders but is still written in a way that even novices can gain some insights.
4. Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits by Dan Passarelli
Though it’s not always necessary to understand option greeks, doing so gives traders a leg up in their analysis and investments. The option greeks – gamma, delta, theta, vega, and rho – are the techniques for executing trades and valuing options that you need in order to keep up with the always-changing options market.
In Trading Option Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits, Dan Passarelli, an experienced options trader, explains these techniques in simple terms and offers valuable insights into the options market. This book is regarded by many as an essential guide for both experienced and aspiring traders due to its ability to effectively explain how the option greeks can be used to facilitate profitable trading strategies.
Because the book delves a bit deeper into the technical aspects of options pricing, veteran traders will get more out of the material than novices.
5. The Option Trader’s Hedge Fund by Mark Sebastian, Dennis A. Chen
Offering an excellent business plan for options trading, The Option Trader’s Hedge Fund, written by Mark Sebastian and Dennis A. Chen, uses real-world examples to demonstrate how you can run your own personal hedge fund. This fantastic step-by-step guide shows you how you can set up a short option investment portfolio.
The presentation of this book’s core ideas makes it easy for beginner traders to understand the key principles of trading options. Their practical experiences as a hedge fund manager and options trading coach bring real-world lessons that supplement the practical steps to put the material in some context.
What’s interesting is this book covers more than just options trading, but how to set up business trading options.