Book Review: Get Rich with Options

Having a basic knowledge of options and option trade strategies I was excited to read Lee Lowell's Get Rich with Options: Four Winning Strategies Straight from the Exchange Floor (Agora Series). The primary appeal of the book was its promise to provide four specific option strategies for making a profit in bull and bear markets (the second edition includes a fifth, 'bonus' strategy).

For a beginner option trader who may have never heard of a call or a put, this book will move you quickly from defining some basic option terms to trading specific strategies. The book is ideal for an investor with a basic understanding of options but who has never put together a game plan for trading specific strategies. Lee Lowell details five of his favorite strategies:

1) Purchasing Deep-In-The-Money Calls in lieu of purchasing the stock outright.

2) Out-of-the-Money Naked Put Selling (only on stocks you may want to own someday).

3) Credit Spreads, a strategy he refers to his as an 'All-Star Strategy'.

4) Selling Covered Calls.

5) Ratio Option Spreads.

The primary theme of his strategies, besides purchasing DITM calls, is that investors should seek to get paid when they trade options. Most beginning investors think of options as a lottery ticket, however, as Lowell details there are several strategies an investor can implement to get paid to sell options.

The title of the book and its promise to 'get rich' may be apt if you are on a long enough timeframe (years). I would stress that there is no magic ticket in investing, option or otherwise. Thus, once you have read this book you will still need to a) familiarize yourself with an options software platform to analyze potential trades, and b) identify potential securities on which you are bullish/bearish/neutral. The option strategies in the book can help you profit from your security analysis but this book is not going to help you actually pick the securities on which to trade options.

If you are an experienced option trader or have ever traded a ratio spread, then this book is too basic for you. However, I think it has substantial value for the beginning to intermediate options trader.