Options as a Strategic Investment: Fifth Edition Hardcover – August 7, 2012

This is the ultimate book on options and well worth the cost and effort to read it. Few people will ever want to read the entire book. Read the sections that match your option interest and investment strategy. An option position can be a safe and secure part of your investment portfolio management, adding income, protecting gains and avoiding heavy losses. At the same time an option position can be very risky with the possibility for unlimited losses. There's lots of hype floating around on making big money trading options. Beware the hype. This is not that book.This book has all the basics, read those sections. Go back and read them again. Explore the more complicated strategies more slowly. If you want to dig into real detail and the mathematics, it's there if you want it. This book would be the obvious choice for a two semester sequence as part of an undergraduate or graduate fiance program. At the same time if the extent of your interest is limited to buying puts and calls, generating income through covered calls and maybe buying stocks at lower prices through short puts, this book should still be in your library. If you have enough money to feel comfortable with the more risky aspects of options (100% losses sometimes) you certainly can afford to buy this book.In spite of the detail provided, each chapter is well written and not difficult to digest. It's the totality of the subject and the wide variety of trading strategies, some of which are complex and should be undertaken only by those with discipline and self confidence.I found this book a perfect companion to pursuing options trading through a free, on-line program offered by the Chicago Board of Options Exchange (CBOE). This is a program of on-line self training, with a certification test for each training module and a series of comprehensive tests for the basic, intermediate and advanced certification level I have completed most of the modules and concluded that many of the more complex strategies should be left to the real experts. Again, like this book, go with what you are comfortable with.

I've read every search result online about options trading, and learned enough to start messing around with it. I've been trading them for a few months with a small account. Then I bought this book and realized how much I don't know.Just a few things I have learned from this book:- The inner workings of the options market, including what happens behind the scenes when an option expires or gets exercised.- The best explanation I've ever read of time value decay and how it relates to volatility of the underlying stock- Why you probably should trade short term options instead of long term- How to calculate a realistic estimate of risk vs. reward of a potential option play- Different ways of writing covered calls depending on how aggressive or conservative you want to be- How to compare different options from the available expiration dates and strike prices- The pros and cons between writing an in-the-money option or an out-of-the-money option.- How dividends can increase the risk of being assigned when writing a call option- How to roll down a covered call option to maneuver your way out of a losing stock position.I've learned all of this in the first 60 pages, and this book is over 1,000 pages. This book has paid for itself already with what I learned. Despite being jam packed with information, it is actually very approachable for anyone with the most basic knowledge of options trading.I'm not kidding, buy this book!

This should not be your first book on options. It will demoralize and kill your enthusiasm if you do not minimally have a working knowledge of puts/calls. If you have that basic knowledge, and if you really want to learn about options, this is the approved textbook. What Frank J. Fabozzi is to Mortgage Backed Securities (MBS) and Asset Backed Securities (ABS), Lawrence McMillan is to Exchange Traded Options. This book is not a particularly fun read nor a breezy one. It is not a get-rich-quick program. However, it is a mountain of useful, detailed knowledge. You will approach this book like you would a college class - graduate level. It will take work and dedication to accomplish. You do not need to a rocket scientist to understand what McMillan is teaching you. You need patience. You'll get it - he'll teach you. You will be rewarded with an understanding of the capital markets that very few comprehend. From that point, you'll probably look with disdain upon so many of those books that offer systems or guides to the options market. You will know more than those authors, and you can create your own system - with Confidence. I am an expert in options (exchange and OTC), swaps, derivatives, MBS, and CLOs, and I recommend this book.

This is a great book to learn Options trading. For all the nerds that don't want to pay a few bucks for one of the many options trading apps out there (OptionStrat, Barchart, etc.) to predict returns, probabilities and volatility, this book has all the theory you need to build your own spreadsheet or program. The book is geared towards investing with Options, not speculating. This will not teach you how to 0Day trade, but does acknowledge the practice and explain the risks in those types of strategies. It goes into great detail about all the different variations of call/put combinations, what situations warrant them for max effectiveness, and how to properly unwind should the stock move against you. This will not teach you what stocks to pick, but it does help you recognize advantageous situations and which strategy to employ for that situation to get the best probability for profit. Overall, it's a great reference and will help build confidence to employ strategies you may have shied away from in the past because you didn't understand all the risks.