Getting Started in Options

This is an excellent book to gain confidence in writing calls. It teaches you how to make your money work as hard as you do.

I loved this book. I gave it to my mother when she was interested in options after she saw my success. My success has come from a year and a half of study of the markets, small time investments, and a dead on focus of the securities market, though I am beginning to expand out there into futures contracts, which I've gotten the Getting Started in Futures book, which I think is average compared to others, but that's a different review.Getting Started with Options is your basic guide to what you need to know about options before you start using them. For the every day investor, they're a great tool for speculation when your capital is tied up, or it's a, "if this happens" moment, and you don't want to risk a lot of capital for what will surely be a gap up or gap down scenario. This was one of the first books I got on options, and though I wouldn't accredit it with my first twenty thousand dollar trade that cost me a total of two thousand dollars, or my ten thousand dollar trade that cost me a little more than a hundred and fifty dollars, counting commission, Brian Burns book, and Lawerence McMillians book are to thank for that, I accredit this book with giving me all the preliminary knowledge in easy to understand writing that didn't complicate, or make Options look scary.I would feel wrong if I didn't say that I consider stock options less risky than stocks as a "Trading" tool (as an investment, the risk is about equal). Unlike stocks where you need a massive amount of capital, 2,000 dollars to buy a hundred shares of a twenty dollar stock. 5,000 for a fifty dollar stock, in which case, you might tell yourself that if it goes down three points (300 dollars) you'll sell, but one day, wake up in the morning to discover that some news has driven the stock way down in the pre-market, and be out a thousand (any long term investors or intermediate trader has been there once or twice I'm sure) with options, you know your loss right off the bat, and need limited capital. That to me has always been the one thing I hated about stocks (I learned to manage the risk, but I now much prefer options), so little control over how much I'm willing to lose, since I don't want to lose the entire investment in a stock. 90% of the time, that doesn't happen, if a stock goes down, you get stopped out, or you can choose to sell, but it's that other ten percent that can leave a pit in your stomach, wondering how you missed it. Options to me, if you're trading the contracts and treating them like a trade, with position sizing, money management, and a systematic strategy, options become one of the safest things to trade, and get a bad name because your investment can become worthless (which to me is ridiculous since you can trade with so little money). But the risk/reward ratio is much better. An example, than back to the review. You buy a .25 cent ($25) July option that XYZ is going to 30 dollars. It's at 27, the next day, the stock goes up to 29 dollars, the contract is now worth .40 ($40), then the next day it goes up to 30.10 cents, the contract is worth .80 cents ($80) that's a 220 percent gain on investment. Had you bought a hundred shares at 27.00 you would spend $2,700, the stock moves up 3.10, you now have 3,010, it's about a 12% gain. Let's say you were willing to lose eight percent before selling your stock. Thus the stock goes down to 24.50. A 250 dollar loss before you sell. If you invested that 250 into the options at .25, you would get 10 contracts, you would make 800 dollars, or... it becomes worthless, and you lost exactly what you would have lost, had you invested in the stock and the stock went against you. That was a real trade I made, in NETL, that's still on going, I bought a hundred contracts, sold fifty, which made me a profit, and makes the rest of the trade, whether successful or not, free. I have a realized profit of fifteen hundred dollars in two days, with another 2,000 in contract value (the stock dropped to twenty nine and the contract became .40).Getting Started in Options is a great book that will get you started in options. Another Getting Started book I would suggest would be Getting Started in Chart Patterns by Thomas N. Bulkowski, also I would suggest Trader Vic's two books, Stan Weinstein book, William O'Neil's books, Martin Zweig, and Nicolas Darvas, since they all focus on break outs, which, in the options world, is a cash cow if you know how to play it right. If you know what you're doing, you're willing to speculate on market conditions, Trend Following by Michael Covel can help with that, and you're willing to speculate with the fundementals and technical moves of a stock (William O'Neil will help with that), and understand how the world effects things (Trader Vic, and Martin Zweig will help you there), then you can not only trade options as an added investment, but as a job with great returns.For my top eight Call Option picks, they're stocks I used to be long before deciding to trade options almost exclusively, look in the comment section if interested. Of course, I give warning, it's only my opinion.

This book provides a general knowledge base of basic option terms and descriptions, with generic examples included. You'll come away with a basic knowledge of primarily calls & puts (both buying & selling), and some advanced strategies. However, you'll need further reading to help you navigate the real options trading world. Primarily discipline, setting stops and taking profits when you can before time decay erodes the gains or the stock turns in the wrong direction. Not to mention buying strategies (finding the right stocks and the navigating the bid/ask when buying & selling).For it's purposes, this is a decent book. Just realize you'll need to do more reading to become an "expert"

The essential options book

I bought this book with no knowledge of how options worked. I had read "When Genius Failed" about LTCM, the worlds biggest hedge fund which failed in the 90's. The book had discussed options a lot and had sparked an interest in me.I had wanted to get into trading options for a while and had tried reading about them on investopedia and various other sites. Finally I decided to settle for this book. Options is an awesome book for beginners like myself. Thomsett smoothes out Options and really makes you understand everything from the basics to more advanced options strategies. The book is filled with scenarios to support each new topic and is not dry or heavy reading.I actually was reading it the other night on the train on the way home from a concert. The man across from me commented that it wasn't exactly light reading for a late train ride. I hadn't even thought about it that way. Options can be intimidating and textbook style books can be boring, however this iis not true for this book. I strongly reccomened it for the prospective options trader with little knowledge on the subject.