Option Trading Books

“The author has written a truly complete reference book on options trading, from basics to strategies to taxes and theory. Newcomers to options can quickly find a clear explanation of terms or strategies they aren’t familiar with, and experienced traders can expand their understanding of how complex strategies are created.”

--Jim Bittman, author, Trade Options Like a Professional

“For a new perspective about options, I recommend Michael Thomsett’s comprehensive The Options Trading Body of Knowledge. Traders at all levels will enjoy his easy-to-read style as he explains options from A to Z. The options industry has needed a reference like this for a long time.”

--Marty Kearney, Senior Staff Instructor, The Options Institute

The Comprehensive, Up-to-Date Reference for Every Options Trader

• By Michael C. Thomsett, author of the global best-seller Getting Started in Options
• Illuminates virtually every technique and form of options trading--including options on futures and ETFs
• Helps you consistently choose the right options strategies and understand your true risks

Options offer investors multiple opportunities to enhance their profits. However, options trading is complex, and the sheer scope of available strategies can overwhelm traders. Today, options can support a wide range of strategies, from high risk to conservative. Moreover, options are available not only for stock equities but also for futures, indices, and mutual funds. To trade successfully, traders need an authoritative, up-to-date guide to all the strategies available to them. Now, renowned options expert and best-selling author Michael C. Thomsett has created the definitive reference for options traders at all levels of experience.

Thomsett systematically illuminates each key technique and strategy: how trades are structured, how to assess risk, and when each strategy is most applicable. For most strategies, Thomsett presents detailed tables and illustrations identifying profit zones, loss zones, and breakeven points.

This book thoroughly explains how option premium develops based on various elements of value, walks through the calculation of returns on options trading, discusses how federal taxation works in the options market, shows how stocks are picked for options trading, and provides a complete glossary and additional resources for traders.

• Thoroughly Comprehend Options Trading Risks
• Systematically evaluate risks associated with markets, volatility, inflation, taxation, portfolios, and knowledge
• Understand All the Elements of Value in an Options Trade
  Master concepts ranging from time-to-expiration to implied volatility
• Use the Right Strategies at the Right Time
  Know when to use covered calls, spreads, straddles, combinations, and synthetic positions
• The Options Marketplace: History, Evolution, and Trends
  Understand both the “forest” and the “trees”

Price: $25.54

User Reviews about The Options Trading Body of Knowledge: The Definitive Source for Information About the Options Industry

Thomsett' book may be viewed as three books in one or as a three part book;
Part 1 (first 80 pages) provides a concise and clear expose of what every trader/investor needs to know about securities (stocks and options) as elements of a well managed portfolio for a high rate of return with manageable levels of risk. Part 2 (110 pages) lists most any options strategy that you can think of, in a format suited for review and reference. Part 3 (90 pages) provides a comprehensive glossary and reference list for books and on-line sources for option traders.

Thomsett's introduction to History of Options is fascinating, especially since it refers to Aristotle's `Politics' from 350 B.C. and Tulipmania in 1637 AD, elucidating an excellent distinction between well thought out strategy vs. greed driven crowd following. The entire presentation is excellent. I wish the numerous paragraphs of prose were also interspersed with a few more figures to break up the monotony of thousands of words, albeit strewn with pearls of clear wisdom in almost every paragraph. Mr. Thomsett has a way with words; example- `any position with both calls and puts that is not a straddle is classified as a combination.'

The term `extrinsic value' has multiple definitions, but I like Thomsett's choice to keep Time Value distinct from extrinsic value, the latter being attributable primarily to implied volatility. Other authors appear to have left it entirely to Thomsett to point out that `options are one of the few alternatives for offsetting the inflation and tax risk combination without violating your own risk tolerance level.' While there is a dearth of figures, there is an abundance of tables with valuable information such as `Breakeven Rates' of gain to offset Tax and Inflation Risk (Table 2.1).

Given my penchant for mathematical equations, I was pleasantly surprised to find that Mr. Thomsett has successfully presented `Elements of Value' for options without the need for Black-Scholes Equation (which is, of course, included in the extensive Glossary). The author has successfully demonstrated that `traders will improve their overall portfolio performance by defining their goals in advance'. The simple formulas the author uses to calculate annualized returns for correct choice of options and other useful metrics are well within the average reader's grasp.

The discussion of option strategies in Part 2, would be more amenable to a greater number of readers if Mr. Thomsett chose to cover the simplest strategies (such as Long Call, Long Put, Covered Call and Married Put), up front to introduce the notation and the profit/loss charts without having to muddle through Alligators (in A-C group) to get to the Long Call in D - P group.

In summary, this book is definitely worth owning by every option trader interested in good portfolio performance.
Options Made Easy: Your Guide to Profitable Trading (2nd Edition) -- Thomsett Succeeds in Imparting Options Knowledge

The book is an ok review or reference book, but for the beginner, go with Getting Started in Options , much better! This title is one to add to complete your info source. But McMillan Options as a Strategic Investment is much better resource. -- not his best work

This is only the intro and first chapter, but it does a good job of explaining the basic terms of options trading. We've been considering doing some options trading, but I couldn't seem to follow my husband's explanation of how they worked. The author does a pretty good job of explaining with examples. -- good intro to options