No matter how many books on Options trading you may have read, there has to be a few you keep coming back to.
In this article, I will share 7 Must read Options trading books for beginners and experienced ones.
What makes these option books unique is not just the great trading strategies.
You will discover that you need more than great option strategies to make it a a successful options trader.
Best Options Trading Books For Beginners | What Are you Looking For ?
If you are in the market for a good options trading book, you are likely to be in one of the following situations.
Maybe you are just starting your trading journey.
Thus you may be wondering where to start or how to go about laying down the foundation.
Should this be the case, basic knowledge about options trading is what you are looking for.
Most books on options trading will certainly provide enough such information.
Another possibility is that you have already started trading options.
Inspiration and Motivation
Yet you are a source of inspiration or motivation to help you take your options trading to the next level.
Or maybe you find yourself looking for options trading books on strategies and techniques in order to improve your success rate ?
No matter you current circumstances, these must read options trading books we are about to scrutinize are bound to help you greatly.
Books On Options Trading | Classic “For Dummies”
In the age of the internet, the phrase “for dummies” has become synonymous for beginners.
Though it may appear as such, our first book on options trading assumes a great deal about its readers.
Trading Options For Dummies by George Fontanills
This 2008 best seller by Georges Fontanills is devoted to teaching you one of the most importnat thing to focus on in options trading.
That is Risk Management.
And Why is Risk management so important in options Trading ?
Well, because if you can take care of that, the wins will come eassier.
Risk management in different market conditions will prevent you from being sidelined because you no longer have any money to trade with.
With a Catchy subtitle “A reference for the rest of Us” , the book does not disappoint in that regard.
By the way, that is a potential reference to Seinfeld’s “Festivus for the Rest of US” classic episode.
Takeaway From Trading Options For Dummies Book
I really appreciate the structure of this book on trading options.
Beyond the main purpose of showing you how you can built a portfolio of options for your retirement, the side notes provides a higher level of knowledge that will increase your overall confidence.
You will also enjoy the breakdown of the economic sectors.
I have been recently coaching options beginners traders on this very topic using Finviz.com.
A lot have changed in options trading since the original publication of this book in 2008.
For instance, the options identification table below is completely obsolte nowadays.
Such extra information is certainly what makes Trading Options for Dummies book a bit long with 388 pages.
However, that should not deter you from this Must Read Options Trading book.
You can easily skip to the chapter of interest to you without missing the continuity of this great content.
#6 Best Option Trading Book | Mastering The Trade By John F. Carter
The word to “Master” denotes something that you have the highest expertise on.
That is what I like about this book on Options Trading.
It is not just settling for common knowledge.
Au contraire, the bar is set to achieve Mastery level because only then will you be able to attain your desired results.
In each new edition, the author is refining the level of expertise in day trading and swing trading.
If this style of trading suits your personality, you will be in for a great treat for knowledge and excellence.
I took great please in the second chapter about the psychology of trading as I have been sharing ever since we started this blog.
#5 Options Trading The Bible
This Options Trading book is actually 4 books merged into 1.
Options Trading the Bible starts with a beginners’ guide and take you all the way to advanced techniques.
It can be overwhelming at first but with patience you will be glad to stick with this one.
I like the fact that it is available in Audible Audiobook version as well.
Which makes it very practical to listen to when at the gym for instance.
#4 Options As A Strategic Investment
In the 5th edition of this encyclopedia (total page count is 1048) on options trading, you will learn more than you have ever done before.
Other than the book itself, you have the opportunity to purchase a study guide so that you can put into application the knowledge you are acquiring.
I have always found it more rewarding to have a study guide when going through any type of book.
In this regard, Options as a Strategic Investment will not disappoint at all.
#3 Top Options Trading Book
Investing Quick Start Guide earned its place in the Top 3 because of the in-depth information it brings to the table.
As a beginner, you will have a complete view of what investing is all about.
However, the strategy used by the author Ted D. Snow may not convince you to take a similar path.
Such was the case for this reader below.
Oh, boy. This was a good book overall, but I definitely have some Opinions on it.
First, the good.
1. This is truly an absolute beginner’s guide to investing. When many books say that they’re a beginning guide to fill-in-the-blank topic, a lot of times they’re only sort of right in that they expect you to know some definitions and some basic idea of the topic already. Not so with this book. Probably the book’s greatest strength is that it starts from the very beginning. In that vein…
2-3. I loved how the first few chapters had really great fundamentals of investing, including really great definitions and little story problem math examples on how the various items worked.
3. The chapter on various financial statement analysis metrics was another very good introduction to the topic.
4. He had a really good emphasis on not freaking out when your investments are down and selling off based on feelings. Buy low, sell high is a fundamental that you cannot go wrong on. It’s just figuring out the highs and lows that can get ya, as is the way that “traditional” investing works.
And the weaknesses. For the sake of full disclosure, many of these items I consider to be weaknesses because I do not agree with the author’s strategy of investing. I’ll explain as I go.
1. Throughout the book, I felt really confused as to whom this book was meant for. The beginning chapters had all the great definitions and story problems. There was another chapter where he talked about how he as a financial advisor wasn’t snobby enough not to want to advise middle class people (vs those advisors that only accept people with over a certain threshold to invest). Those things made me think that this was for the Average Joan like me who wants to save for retirement. But then, there was this whole long chapter on derivatives, futures, options, etc. His warning about how risky these instruments are was not as fear-inspiring as I felt it should have been had this truly been a book for the Average Joan like me. Which also leads into…
2. YOU CANNOT HAVE A DISCUSSION ABOUT ROTH IRAS WITHOUT DISCUSSING NOW VS FUTURE TAX RATES. I’M SORRY, BUT YOU CANNOT. Seriously. The author does not misstate the benefits of Roth IRAs in that their growth is not taxable, but you also have to take into account that if you’re waiting until retirement to pull from the Roth, you will PROBABLY have a lower tax rate by then (in which case you should think about putting the bulk of what you can into traditional IRA so that you pay less money in taxes OVERALL IN YOUR LIFETIME.
3. Here’s where we get into critiques because I do not agree with the author’s overall strategy. The author believes that “The mark of an excellent investor is to consistently outperform the market.” Over time, the total stock market average growth is 8%. Why shouldn’t I just come up with a good asset allocation and just invest my money in a total stock market index fund?? As the Average Joan investor, I don’t have time to perform fundamental analysis for every stock I pick, and I am certainly not going to have any sort of information that gives me any insight that people who actually do this for a living will have. The author briefly mentions indexes, but he doesn’t present a compelling case either for or against them. Which brings us to….
4. Fees. There is a short discussion of mutual funds/index funds, but there is NOT ENOUGH EMPHASIS on how actively traded funds include all sorts of micro fees and commissions and everything that absolutely DEVASTATE your investment growth over time. There is no discussion on the numbers behind why you want a fund that has 1% or less in fees as well as being a fund that doesn’t generate a high trading volume (back to point 3: as the Average Joan investor, I buy and hold because I’m literally investing in the ENTIRE stock market with my low-cost index fund. Unless the literal apocalypse comes, I’m betting with my money that the market will rally over the long term, and I’d rather have the stability of the entire stock market than have to make guesses about what’s going to go up and down in an attempt to beat the market).
5. The author overstates the benevolence/effectiveness of financial advisors. To be fair, he did mention that you should expect your advisor to have an ethics statement as well as to be fully transparent about their fees. However, he did not emphasize enough that they need to be EXPLICIT about whether they are legally required to act as your fiduciary or not. If they’re not your fiduciary, there is no incentive for them not to push you into riskier investments where they might have a commission you don’t know about. I do concede his point that advisors potentially help keep a client from selling off in times of panic, but you have to have the right advisor.
6. There is a cursory chapter on FIRE at the end of the book. Which is fine, but….due to his own interests of being a financial advisor (and therefore wanting your business to come to his company) there is no discussion on the actual fundamentals about how most FIRE people go about it. There’s no discussion of the benefits of index funds and no discussion on safe withdrawal rates (which I consider to be two of the most fundamental parts of most FIRE plans).
So there you have it. As a “traditional” investment book (i.e. pick your specific stocks, use an advisor, etc.) this is a good book. But when there’s so much data out there on how likely it is that you will consistently beat the market with your individual investments (view spoiler) I’m just not convinced that my total stock market index fund will be any worse than the alternative. In the words of John Bogle in The Little Book of Common Sense Investing, “Don’t look for the needle in the haystack. Just buy the haystack!”
#2 Best Options Trading Book For Beginners
Market Wizards by Jack D. Schwager is an entertaining series of interviews by top traders in Wall street.
They share great insights that are certain to trigger awareness.
Awareness will spotlight opportunity.
And the opportunity engaged with your preparation shall create the desired results.
#1 Must Read Option Trading Book in 2021 and Beyond
Three bid for Ten. Three bid for Ten. Three bid for ten.
These are the opening words in the first chapter “Trade or Fade” of Pit Bull by Martin “Buzzy” Schwartz.
From the opening page, you will be captivated by the story of this Options Trading book also tiltled Lessons from Wall Street ‘s Champion Trader.
From that alone, we can infer that a great deal of knowledge is shared inside.
So what are those lessons ?
What Will You Learn in Pitbull by Martin Schwartz
The biggest lesson for me is the inspiration that it is possible to achieve great success in options trading despite the many struggles.
In this autobiography, the author shared how he resented the thought of going back to his 9 year old job.
I can tell you by my personal experience and the many traders I have been coaching.
Most people come to trading because they want to change their current lifestyle and circumstances.
This reason alone can act as a motivation for you or instill so much fear you cannot perform.
Hence the pep talk to himself on that that trade on Mesa Petroleum.
You may have your own internal fear as you read this article.
Should that be the case, I encourage you today to pick a copy of Pit Bull to help you overcome that obstacle.
Other Lessons I Learned From Pit Bull
Having A Methodology Gave Me Strength
The secret in winning in Options trading as well as the stock market in general is to have an edge.
Such edge is developped over time.
It come from a proven methodology that will bring you the confidence in knowing where your winners will be coming from.
Such confidence will be your best asset in trading the market.
Your strength will come from your set of strategies.
I tell traders in our Discord room that one day does not define a strategy or even one single week.
Consistency is developped over a long period of time.
Below is a chart that illustrates the consistency of one of my Successful Tradings /Methodology.
Rather than relying on providence or just luck each and everyday.
You will find it quite rewarding and satisfying to spend the time needed to work on this crucial step of your options trading career.
Learn To Divorce Your Ego From The Trade
I have made this my personal mantra to the point where my viewers YouTube have caught on to the phrase: I am not Married To any stock.
Your success rate in Trading Options will skyrocket the moment you master how to leave your emotions out of your trades.
As human beings, that task is not as easy as it sounds.
However, giving that you are now aware of the many snares emotions bring to options trading, you are less likely to repeat this pitfall.
Stern Discipline of Stop Losses
This concept is often neglected in many options trading courses.
I recently had a trader contact me on how to setup trailing stop orders.
Immediately after we finished our discussion, I felt the urge to create this short video
Have Your Priorities In Order
Options trading can get traders into very bad spiral.
Even when you are winning, it is very important to allow yourself breaks.
What this menas is that taking time off to enjoy what matters the msot in your life is perfectly okay.
The market is not going away – at least not anytime soon but we all have an expiration date.
The sad part is that we can be busy making all the money we can trading options.
But if we do not have the health to enjoy the fruits of our Labor, all that work will be in vain.
We shared our 7 Must Read Options Trading Books for nay beginner trader.
The next step after acquiring the knowledge from these books is to put it in practice.
Should you need a coach to further enhance your skills, Successful Tradings is an education service to consider.
We have our proven strategies we will help you Master in order to grow your account and achieve financial independence.