A Reading List For Options Traders
Summary
- What traders can read about options trading.
- My favorite books on options, fundamentals.
- Many of my blog posts here are for new options traders.
By Donald E. L. Johnson
For me, the key to success in trading covered calls and selling puts was investing time and money to get educated. Then I paid tuition by losing money on a few of my early small trades. Most important, just do it.
Focus on articles, chapters and videos about trading calls and puts, covered calls and selling cash secured naked puts. Understand deltas and learn the basics of fundamental and technical analysis.
Lawrence G. McMillan's book, Options as a strategic investment is a must read.
Guy Cohen's book, the Bible of Options Strategies, the definitive guide for practical trading is very handy. I use it to create spread sheets to track my trades. He writes about how to get into and exit trades and gives good examples.
The 2nd edition of Brian Nelson's Value Trap advocates focusing on companies' future free cash flows, not ambiguous historical metrics. Once you get around all the self. promotion, it's a valuable book.
Irrational Exuberance (2nd edition), by Robert J. Shiller will educate you about the history of several markets like no other book I've read.
Daniel Kahneman's book on decision making and data analysis, Thinking, Fast and Slow is a must read for speculators. We're all speculators.
Many brokers offer videos and other educational materials on their platforms and web sites.
Optionplay.com has an extensive archive of webinars on options trading, but it pays too much attention to complicated trades. I believe in keeping it simple, which is why 99% of my trades are covered calls and sales of cash secured naked puts, not complicated spreads.
If you read my archived blogs here on options trading, you'll get a feel for how I operate. I don't post much these days because I'm busy trading. But my archive has some things that were written for beginning traders.
If you follow me and check my comments, you'll see that I frequently post about options trading in comments sections that follow articles touting stocks and ETFs.
Analyst's Disclosure: I am/we are long About 30 stocks; several covered call and naked puts sales positions.
All of my comments and blogs are for educational purposes. I'm an individual speculator, not a professional nor a financial advisor nor analyst. I take no responsibility for anyone else's trades. All trades are risky. So is life.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.