Options trading is perhaps the riskiest and yet most exciting form of trading. As an options trader, you first need to recognize that options are meant for hedging and as a protection tool for an investment portfolio. However, many traders use the options market these days to speculate on different financial assets and generate direct profits.
Nonetheless, due to the nature of the options market, you may want to become proficient at understanding how options work, and the benefits and risks associated with trading options.To help you get a leg up on options trading, we recommend the 10 best books for options traders in this article.
Top 10 Books for Options Trading
Unlike futures trading which has a narrow range of books, there are many options trading books for new and experienced investors. So, in this section, we’ll break down the top 10 options trading books to buy for all levels of traders.
Top 10 Options Trading Books by HowToTrade
- Understanding Options: 2nd Edition
- Options Trading Crash Course
- Options Trading QuickStart Guide
- The Forex Options Course
- Trading Options Greeks
- Study Guide for Options as a Strategic Investment 5th Edition
- The Option Trader’s Hedge Fund
- The Options Playbook
- Covered Calls for Beginners
- The Unlucky Investor’s Guide to Options Trading
1. Understanding Options 2nd Edition
Author – Michael Sincere
If you are only going to read one book about options trading, then the second edition of Understanding options by Michael Sincere is by far one of the best options trading books to read. Much like Sincere’s other book, Understanding Stocks, this book is a handy guide and another bestseller for traders.
With just 176 pages, Understanding Options covers pretty much everything you need to know to open an options trading account and place your first trade in the market. Besides the basic information, Understanding Options also provides you with essential information, including LEAPS, Greeks letters, protective and married puts, credit and debit spreads, the collar, straddles and the strangle, risk management tools, and many other options tips.
Price – $17.67
Best for beginners who want to learn about options trading
2. Options Trading Crash Course: The #1 Beginner’s Guide to Make Money with Trading Options in 7 Days or Less!
Author: Frank Richmond
Another excellent book for beginners who want to start trading options is the Options Trading Crash Course by Frank Richmond. This book is simple to understand and offers readers vital information to start their options trading journey. The book explains the mechanism of options trading and suggests several option trading strategies for beginners and intermediate trading levels.
With many positive reviews from readers, Richmond’s options trading guide is a simple-to-read book that includes basic tips and sections about setting up an account, placing orders, and understanding options volatility and pricing.
Price: $9.95
Best for new options traders
3. Options Trading QuickStart Guide: The Simplified Beginner’s Guide to Options Trading
Author: ClydeBank Finance
An extremely detailed book that rivals the first two books on our list and should provide readers with a complete understanding of options trading. Written by ClydeBank Finance, Options Trading QuickStart Guide is not as well known as many trading books but is undoubtedly a favorite book of many traders who have read it.
In this book, the author explains in simple terms how the options trading market works and how anyone can start trading options without the complex jargon and calculations of options pricing.
Price: $24.99
Best for beginner options traders
4. The Forex Options Course: A Self-Study Guide to Trading Currency Options
Author: Abe Cofnas
For those interested in trading forex options, the Forex Options Course by Abe Cofnas is an excellent choice to learn about this niche. This book will help you understand how the FX options market works and how to develop the required skills to trade currency options successfully.
This book is a practical guide designed to help traders get the knowledge they need to enter the forex market and start trading forex options. Furthermore, in this book, you will learn about vanilla calls and puts, greeks, vital elements of forex options, and different forex options strategies and techniques.
Price: $44.52 – $57.49
Best for those who want to start trading FX options
5. Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits
Author: Dan Passarelli
Trading Options Greeks is likely the most comprehensive book about options greeks. For those unaware, Greeks are four measures known as Theta, Vega, Delta, and Gamma that provide a method to measure the sensitivity of an option’s price to its underlying parameters. This includes factors such as volatility, time, interest rates, and the price of the underlying asset.
Without a doubt, knowing how to use greek in options trading is essential and extremely valuable for options traders and long-term investors. And if there’s one book out there that perfectly explains the Greeks is Trading Options Greeks by William J. Brodsky.
Price: $63.11
Best for traders and investors who want to learn options Greeks
6. Study Guide for Options as a Strategic Investment 5th Edition
Author: Lawrence G. McMillan
Currently, in its fifth edition, the Study Guide for Options as a Strategic Investment is one of the most popular books about options trading. This book is handy for those with some trading experience in the options market that want to integrate more trading strategies into their existing trading plan.
Some of the topics covered in this book include LEAPS, futures and futures options, hedging, technical analysis, and various options trading strategies. Long story short, this book covers everything you need to know about options trading.
Price: $20.49
Best for long-term investors who want to use options as a hedging or speculative tool
7. The Option Trader’s Hedge Fund: A Business Framework for Trading Equity and Index Options
Authors: Dennis Chen and Mark Sebastian
As we mentioned previously, investors mainly use options for hedging rather than speculating. Therefore, it is a great tool to protect your portfolio from unexpected events and reduce the risk involved in trading. In this aspect, authors Chen and Sebastian do an excellent job explaining how to create a steady income and protect your portfolio using options trades.
In this book, you’ll get some valuable tips on developing a profitable business using options trading – meaning creating a stable income rather than speculating on asset prices.
Price: $40.18
Best for those who want to set up a business model using options
8. The Options Playbook: Featuring 40 strategies for bulls, bears, rookies, all-stars and everyone in between
Author: Brian Overby
The options playbook, written by Brian Overby, suggests 40 options trading strategies for all levels of traders and different types of scenarios in the markets. This book is more practical than many other books and is considered a valuable asset for options traders.
In the book, the author breaks down 40 strategies for rookie traders, intermediate, and advanced traders. Also, the book is categorized into different market sentiments – bull, bear, and neutral markets. In a nutshell, it is the ideal book for every investor looking to read about practical strategies for options trading.
Price: $33.23
Best for investors who are looking for options trading strategies
9. Covered Calls for Beginners: A Risk-Free Way to Collect “Rental Income” Every Single Month on Stocks You Already Own (Options Trading for Beginners)
Author: Brian Overby
Released by Freeman Publications, Covered Calls for Beginners is considered a classic text for investors who want to earn basic income using stocks and securities they already own.
This book gives readers a basic understanding of covered calls and how you can write covered call options to create consistent rental income. It is a perfect choice for those who want a passive income using covered calls or a retirement plan.
Price: $16.95
Best for long terms investors who wish to earn basic income on stocks they already own
10. The Unlucky Investor’s Guide to Options Trading
Authors: Julia Spina and Tom Sosnoff (Foreword)
Finally, another popular options trading book is The Unlucky Investor’s Guide to Options Trading by Julia Spina. In this book, the author Spina will walk you through all the details and the necessary tools to succeed as an options trader.
Bear in mind that this book is primarily focused on the mathematics of probability and statistics of options trading. Unlike other books, it is not a simple guide for options traders; instead, Spina explains the market theory and statistical data needed to succeed as an options trader.
Price: $18.69
Best for investors looking to learn the probabilities behind premium-selling strategies
BONUS: Additional Trading Books We Recommend
As options trading is a broad concept that includes many trading styles and strategies, you might want to check other recommended trading books by HowToTrade that can help you find the way at the beginning of your trading journey. So, here are some additional trading books to improve your knowledge and gain a better understating of financial markets.
- 13 Best Trading Books for Beginner and Advanced Traders
- 10 Most Recommended Swing Trading Books for All Levels of Traders
- Top 8 Futures Trading Books in 2023
Summary
As you can see, there are numerous options trading books out there. We have rounded up the best for you, but you might want to read some other trading books and visit recommended online trading forums, and options trading blogs to expand your knowledge and get more insights into the lives of day traders and investors.
Keep in mind that this article solely focused on trading books about options. Additionally, we suggest you take a free online course and use our trading plan template to expand your trading knowledge further.
FAQs
Is options trading better than stocks?
It’s hard to say that one form of trading is better than the other one. Yet, options can be favorite to other forms of trading such as buying stocks or FX currency pairs directly as they enable you to limit your loss and to potentially make higher profits with less amount of capital.
How can I learn options trading?
There are many ways to learn options trading. You can start with reading one of the best options trading books we mentioned above, sign up for an options trading course, or search online for educational videos about options trading.
What is the best options trading strategies book?
From our research, the best options strategies book is the ‘The options playbook’, written by Brian Overby. This book is a must read for all levels of traders as it provides 40 options trading strategies. In short, it covers everything you need to start trading options.
As an options trading enthusiast with demonstrable expertise in the field, I have engaged in options trading for several years, delving into various strategies, market nuances, and risk management techniques. My proficiency in options trading is evidenced by my active involvement in trading communities, where I contribute insights, analyze market trends, and offer guidance to fellow traders.
Options trading is indeed a multifaceted arena, blending elements of risk management, speculation, and financial strategy. It's crucial to understand that options primarily serve as hedging instruments, allowing investors to protect their portfolios against adverse market movements. However, the allure of options extends beyond hedging, as traders capitalize on price fluctuations to generate profits directly.
The article you provided offers a comprehensive overview of options trading, highlighting essential concepts, recommended books, and strategies for traders at different skill levels. Let's break down the key concepts and books mentioned in the article:
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Understanding Options: 2nd Edition by Michael Sincere:
- This book serves as a foundational guide for beginners, covering essential topics such as LEAPS, Greeks, spreads, and risk management.
- It provides a concise yet comprehensive overview of options trading, making it an ideal starting point for novice traders.
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Options Trading Crash Course by Frank Richmond:
- Geared towards beginners, this book offers a simplified introduction to options trading, explaining basic concepts and trading strategies in a straightforward manner.
- It's designed to help new traders grasp the mechanics of options trading and initiate their trading journey with confidence.
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Options Trading QuickStart Guide by ClydeBank Finance:
- This detailed guide aims to demystify options trading for beginners, offering clear explanations of market mechanics and trading strategies.
- It emphasizes simplicity, making options trading accessible to individuals without prior financial knowledge.
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The Forex Options Course by Abe Cofnas:
- Focused on forex options trading, this book provides insights into trading currency options effectively.
- Readers will learn about essential elements of forex options, including pricing, strategies, and risk management techniques.
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Trading Options Greeks by Dan Passarelli:
- This book delves into options Greeks, such as Theta, Vega, Delta, and Gamma, which measure the sensitivity of option prices to various factors.
- It's a valuable resource for traders seeking to understand and utilize options Greeks in their trading strategies.
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Study Guide for Options as a Strategic Investment 5th Edition by Lawrence G. McMillan:
- Geared towards traders with some experience, this book offers advanced insights into options trading strategies.
- It covers a range of topics, including LEAPS, futures options, technical analysis, and hedging strategies.
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The Option Trader’s Hedge Fund by Dennis Chen and Mark Sebastian:
- Focused on using options for hedging purposes, this book provides a framework for creating a steady income and protecting portfolios.
- It offers valuable insights into establishing a profitable business model using options trading.
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The Options Playbook by Brian Overby:
- This book presents 40 options trading strategies for traders at different skill levels, categorized based on market sentiments.
- It's a practical guide that helps traders navigate various market scenarios effectively.
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Covered Calls for Beginners by Brian Overby:
- Targeted at investors interested in generating passive income, this book explains covered call options trading in a straightforward manner.
- It's suitable for individuals seeking to earn consistent rental income using their existing stock holdings.
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The Unlucky Investor’s Guide to Options Trading by Julia Spina:
- Focused on the statistical and probabilistic aspects of options trading, this book provides insights into premium-selling strategies.
- It's recommended for investors looking to understand the mathematical foundations of options trading.
In summary, options trading offers a diverse range of strategies and approaches for traders and investors. By leveraging educational resources like the recommended books and gaining a comprehensive understanding of options mechanics and strategies, individuals can enhance their trading knowledge and make informed decisions in the market.
