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I will not be recommending too many books. There are a few outstanding ones out there, and I will list those that I have found to be the most helpful.
Starting with my all time favourite:
1. Get Rich with Options by Lee Lowell
I usually avoid media with a title like this. The whole concept of “get-rich-quick” and “Seven (or five, or 3 - whatever) steps to a perfect life” is really meaningless marketing drivel. However, after reading some reviews, I took the plunge and bought the book. I am now convinced that this is the only book on option trading that is actually worth buying!
Lowell was a market maker on the floor of the New York Mercantile Exchange (NYMEX), and now heads his own trading business, as well as contributing to several advisories. He inserts an interesting piece on how the option markets work, from a floor trader's perspective.
In the book, Lowell highlights four trading strategies, using options:
- Deep-in-the-Money trading of calls and puts
- Selling Naked puts
- Selling Option Credit Spreads
- Selling Covered Calls; and for a bonus, he throws in...
- Ratio Option Spreads.
Each strategy is explained enthusiastically in every day terms, and he gives tons of examples to show how each strategy works. Each chapter has a section on risk management, and on drawbacks to the strategy, so he isn’t hiding anything. His whole approach is to achieve consistent gains with minimal or controlled risk, as a means to getting very rich over a relatively short time.
At the end of the book, he lists many web resources for reference, and he also gives broker reviews and recommendations. I have read the book cover to cover, and I regularly dip into it to remind me of the details of the trades I am working on. It is without exception the most useful, practical and helpful book on options that I have ever bought.
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