Options are a type of asset class, which is different from other asset classes such as the stocks, bonds, mutual funds, etc. It is a contract between two parties – the seller and the buyer. Through this contract, the seller gives the buyer the right to buy or sell the underlying assets, based on the type of the contract. The underlying assets can be equity shares, stock indexes, Exchange traded funds (ETFs), etc. The price of the underlying asset is predetermined within a fixed period. The price depends upon the value of the underlying assets.
Option traders are those individuals, who are involved in the buying and selling of options in the capital market. There are a large number of books written by different authors on option trading. If you want to become an option trader then this books can help you immensely. The top 5 books one should read to become an option trader are listed below.
Top 5 books on option trading:
- Get Rich With Options: Four Winning Strategies Straight From the Exchange Floor – This book is written by Lee Lowell. This book deals with the various strategies and concepts that one should know and execute to get success in the
optiontrading market. It deals with four option trading strategies in detail. They are buying deep-in-the-money call options, selling naked put options, selling option credit spreads, and selling of covered calls.
- Option as a Strategic Investment – This is one of the most popular books on
optiontrading. The author of this book is Lawrence McMillan. This book will give you an idea about the latest market-tested tools that can be used by traders to increase their earnings and to decrease the risks involved. This book also deals with the various option trading strategies, their concepts and applications.
- The Bible of
OptionStrategies – This book is written by Guy Cohen. The book deals with the various advantages of optiontrading. This can be an ideal book for the beginners as it is written in an easy and crisp language. Guy Cohen has written all the complicated options trading strategies in a very easy and understandable language. Some of the important components of this book trade with leverage, trade for substantialamount of income, reduction or elimination of risks, etc.
- The Option Trader?s Hedge Fund – The author of this book is Mark Sebastian. This book covers all the basics as well as the advanced strategies of option trading. This book deals with how to earn a steady and reliable income by option trading. Mark Sebastian describes the various strategies excellently by giving examples from the real world. This makes it easy to understand and apply these strategies in the market.
- Option Volatility and Pricing – Sheldon Natenburg has written this book. It is an ideal book for professional traders. This book deals with various advanced trading strategies and risk management techniques. The author also describes the working of theoretical pricing model. The various topics covered in this book are dynamic hedging, risk analysis, volatility contracts, etc.