Option Books

[DOTTT]

Anything good out there that would be considered a must read, before starting to trade? Thanks.

[sfer]

If you don't read Options, Futures, and Other Derivatives by John Hull you're flying blind. It's the standard textbook and math intensive.

[TRBNGR]

The Sheldon Natenburg book is a good intro text. From there Id recomment the Jan Allen Baird book, and 'Coulda Woulda Shoulda' by Cottle which you probably can find a pdf of floating around the web. Dynamic Hedging is also good, but probably overkill for retail guys like myself. Option Theory by peter james is also pretty good. And although not strictly a book on options trading, Taleb's 'Fooled By Randomness' is worth a read.

[playerfl]

"Fooled By Randomness" is an awesome book.

[GeorgeF]

Don't waste your money.
1) Go to the best library near you and see what they have for free.

2) Free stuff on the web, start with www.CBOT.com.

3) If you feel you must, buy used books.

4) The options markets accomplish 2 things for the typical individual investor:
1) You can use them to lock in profits without selling and triggering taxes.
2) You can use them to make gifts to the sharp on the other end of your trades until you run out of money.

I personally doubt (but cannot guarantee) that you will be able to win at the options game as it is rigged in favor of the house.

[Glenn]

Hull's book is #1, but if you just want a quick read that will introduce you to the basic concepts without going into too much depth, try "The Complete Option Player".

[Glenn]

First of all, being afraid to buy an $80 book on trading because it's a waste of money is ridiculous. If $80 is a lot of money to you, you shouldn't be trading (especially options) in the first place. Secondly, when you say the options game is rigged in favor of the house, do you realize that one can write options as well as buy them? To be approved to write naked calls, you are going to have to be investing a lot of money, but to write something like a covered call, you usually just need a typical account.

[Paluka]

[ QUOTE ]
Secondly, when you say the options game is rigged in favor of the house, do you realize that one can write options as well as buy them?

[/ QUOTE ]

I'm guessing he was referring to the bid/ask spread in the options markets, in which case the "house edge" is in effect whether you are buying or selling an option.

[Glenn]

Heh, yeah, i realized he may have meant that after I got all snippy [img]/images/graemlins/smile.gif[/img]. My apologies if that's what you meant G.

[GeorgeF]

Options are a tuff game. I myself don't play. I am not saying that individuals can't win but it is really unlikely. I also tend to think (but could be wrong) that the options markets have a higher ratio of 'pros' to 'fools' which keeps me away.

The most important advantage the individual has against the 'pro' is patience in the face of financial pain. The short expiration date of options nullifies this advantage.

As to the $80 I say would be wasted on a book. My guess is that you could buy way out of the money options on 5000 shares of WhatIT Corp. with $80. It is very easy to blow $1000 on a scheme here and a scheme there and end up down $10,000.

If you want to learn anything start with the library and free web resources. Then buy used books.

I personally think people see the leverage of options and think they can solve their financial problems with them. Nah,.