RECOMMENDED READING LIST I have created a core reading list of books that every option trader, beginner or advanced, should read through. Although there are numerous option trading books, this list is a great starting point to get a detailed background in option trading and the tools needed to trade successfully. I have listed the books with a short commentary from me, as well as a link where you can purchase the book or read more about it on Amazon.com. I hope this reading list will be of great benefit to you. Coach Phil The Option Trader Handbook by Philip Budwick, George Jabbour My book focuses on how to make trade adjustments to stock or option positions and covers long an d short stock, calls, puts, spreads, and combinations. The first two chapters provide a great overview of risk and trade management and the tools needed to implement such theories, as well as an outline of a trading plan you should follow for every trade in order to be successful. Basic and advanced trading strategies are covered. www.amazon.com/exec/obidos/ASIN/0471567078/optiontradi0d-20?creative=125577&camp=2321&link_code=as1 Options as a Strategic Investment by McMillian The “bible” of option trading books and a must have. It is written for all levels and covers everything and anything you need to know. It is more of a reference book and you can use the detailed table of contents to find the strategies and tools you need. 4th Edition has great additional information on volatility and only book with detailed sections on indexes. This is the most comprehensive book (at over 800 pages!) on option trading there is and should be the center of your option trading library. Even the most advanced trader will get something new and I learn something new every time I re-read it. www.amazon.com/exec/obidos/ASIN/0735201978/optiontradi0d-20?creative=125581&camp=2321&link_code=as1 Getting Started in Options by Thomasett Perfect book for the newbie looking for a straightforward simple introduction to options and option trading. Not very technical and made for the true beginner. If you are really new to options and intimidated by a large book such as McMillian, then read this one first. www.amazon.com/exec/obidos/ASIN/0471444936/optiontradi0d-20 Volatility Course by Fontanills, Gentile You cannot trade options without understanding implied volatility and this book is a great overview of the topic. Fontanills is skilled at making the complicated read easy and this is most likely a pre-requisite before reading the next book below on volatility. Do not trade options without studying implied volatility and this book is a great starting point. www.amazon.com/exec/obidos/ASIN/0471398160/optiontradi0d-20 Option Volatility and Pricing by Natenberg The “bible” on option pricing and volatility. Not an easy read but a great comprehensive book on implied volatility, using IV when trading, and the Greeks. Read through a couple of times and you will gain a lot of insight and knowledge. If you only purchase one other book besides McMillian, then this is it. Some people have found it useful to read Volatility Course before this one to get a better foundation, not a bad idea. Highly recommended. www.amazon.com/exec/obidos/ASIN/155738486X/optiontradi0d-20 Fundamentals of Options Market by Williams, Hoffman This book has great detailed information about options, the options markets and trading strategies. The best part of this book is that every chapter has a set of review questions which you can work through to really ensure you have learned the material. Plain language of the book helps explain many complicated topics very easily. Good coverage of butterflies in addition to other advanced spreads. www.amazon.com/exec/obidos/ASIN/0071363181/optiontradi0d-20 The Options Course by Fontanills Fontanills is a good source for beginner option traders. He does a good job of explaining the basics and basic strategies in clear language and easy to understand examples. Although the book is not heavy with strategies, it may be worth it for the background on options and how they work. The more information on the basics and basic strategies, the better a trader you will be. www.amazon.com/exec/obidos/ASIN/0471249505/optiontradi0d-20 The Short Book on Options by Wolfinger Good concise introduction to options for beginners. Focus is on use of options for conservative buy and hold investors which proves that options can be used by any type of investor- conservative or risk taker! Good sections on covered call writing. Author is extremely knowledgeable on topic and frequents the Yahoo messagae boards. Great live resource after reading his book. www.amazon.com/exec/obidos/ASIN/1403307768/optiontradi0d-20 Technical Analysis by Jack Schwager You cannot trade options without technical analysis. Schwager has put together a great book on technical analysis covering everything from trendlines to candlesticks. Also discusses trading systems and includes great section on trading tips. I think this book and Murphy’s book below are the two best reads for TA. Schwager adds bonus with his section on trading tips which alone is worth the purchase. www.amazon.com/exec/obidos/ASIN/0471020516/optiontradi0d-20 Technical Analysis of the Financial Markets by Murphy A bible of technical analysis covering almost every single form of TA out there with detailed charts and explanations. I found this book to be an invaluable source for learning TA and is a must have. This book along with Schwager will give you an amazing foundation in TA and seriously imprive your trading capabilities. www.amazon.com/exec/obidos/ASIN/0735200661/optiontradi0d-20 Security Analysis on Wall Street by Hooke Fundamental analysis is just as important as technical analysis when trading options, especially when trading long-term. Benjamin and Dodd wrote THE book on fundamental analysis, but if you are looking for a great overview of how Wall Street does it, this book is excellent. Good overview of different fundamental analysis tools and applications and an inside look as to how Wall Street does it. www.amazon.com/exec/obidos/ASIN/0471177415/optiontradi0d-20
