Home   Options     Forex    Learning Tools        Market Trends Option Trading Tips
     
 

 
 

Recommended Options Books

 
     
 

On this page I will recommend various books as I come across them. I will stick to books that I have personally found to be most useful.

Read any of these books on Kindle:

 
     
 
 
     
 

If you have any REALLY good books that you can recommend, let me know, and I will review them here.


     
 
 
     
 
 
     
 


I will not be recommending too many books. There are a few outstanding ones out there, and I will review 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.

2. Options Made Easy by Guy Cohen

This is the second book that I have found to be incredibly useful. Cohen has an easy writing style, and opens up the detail of options trading in a unique way. Using easy, plain English, he teaches all the essentials with real life examples, and very clear explanations. There is no complicated math or jargon - he gives quite a lot of detail, with supporting diagrams. This book gives the clearest explanation of the Greeks that I have ever found, and with each trading style, Cohen shows which Greeks are relevant, and why they are useful.

One of the strengths of this book is that as Cohen describes a trading technique, he lets you know exactly what technical analysis to apply, and how to execute the trade. He starts with synthetic calls and covered calls, and then moves on to Credit Spreads, Volatility strategies (Straddles and Strangles), and Sideways Strategies (Butterflies and Condors). He also has a chapter on the psychology of trading, and some good tips to understand the market.

I have found this book to be an excellent reference tool, and it has been an essential part of my options trading education.

 

 

Return from Options books to the Home Page