Best Books on Options Trading in India

Best Books on Options Trading in India
Best Books on Options Trading in India

Options trading can be both rewarding and complex. In fact, 9 out of 10 individual traders in futures and options (F&O) incurred losses during FY 2021-22. The average loss stood at ₹1.25 lakh during the same time frame.

The fear induced by options trading has been a hot topic among industry experts, seasoned traders, and newsrooms.

Fortunately, you can turn to many fantastic books on options trading that will help you understand the financial derivative inside-out. 

While these books offer profound insights into the theories, strategies, and mechanics of options trading, they are not substitutes for hands-on experience and mentorship. Aspiring traders need to understand that the concepts elaborated in these books can be complex. So, interpreting them correctly requires valuable guidance from skilled mentors.

So, without wasting any time, crack open the below-compiled list of best books on options trading so you will develop the skills options traders swear by.

15 Best Books on Options Trading [Updated 2023]

15 Best Options Trading Books [Updated 2023]

Options as a Strategic Investment

Touted as the Bible of options trading, Lawrence McMillan’s “Options as a Strategic Investment,” contains practical strategies for maximum profit and minimum risk. If you want to enter the world of options, many expert traders would recommend you start with this book on option trading

It explains standard options threads and which type of market they suit best. Additionally, McMillan walks you through the tips on adjustments necessary when the stock markets take a different turn.

Mind you, this 1980 classic is not a short, concise read; it goes beyond 1000 pages. Nevertheless, this old classic remains engaging and exciting throughout.

Exit Strategies for Covered Call Writing

If you are a long-term investor, covered call strategies are beneficial in generating cash flows from the stocks already existing in your portfolio. Unfortunately, most guides discuss covered call strategies without much rigor – and, more importantly, without ending with an exit strategy.

Enters “Exit Strategies for Covered Call Writing” by Alan Ellman. This book focuses on the expiry period of your covered call contracts and explains everything you should pay attention to. Further, it discusses numerous techniques for how to exit a covered call position as expiration approaches, complemented with real-world examples so that you pick the best one for your situation.

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Fundamentals of Futures and Options Markets

John C. Hull’s “Options, Futures, and Other Derivatives” is a classic in the field of derivatives, futures, and options. It is the standard textbook for students, practitioners, and anybody else wanting to firm their grips on these complex financial instruments.

From the basics of futures and options to intricate mathematical models and risk management strategies, the book covers a broad range of topics. Plus, it provides a solid theoretical basis as well as actionable insights into the applications of derivatives, trading interest rate futures, and strategies to estimate the time value of options.

The Ultimate Options Trading Strategy Guide for Beginners

Abraham has penned this book on options trading to cater to the ideal audience – an entry-level options trader. The author has laid bare leakproof options trading strategies if you only want to book smaller profits and reduce losses. At the same time, if you have given up on options trading out of fear, this book will restore your faith in the financial product as it is mathematical.

In a nutshell, this book, once read, should enlighten you with diverse strategies. Such that you do not need to seek any other resources before taking off options trading.

Options Volatility Trading

Those fed up with reading boring books on options trading will find Adam Warren’s “Options Volatility Trading” a welcome change. The author, without trimming the substantive jargon, gets his point across to those unfamiliar with hard-to-crack options trading terminologies.

Warren has taken references from myriads of historical data and patterns around the volatility of options stocks while penning this crucial guidebook. His in-depth has enabled him to deduce important observations, including the irregularity in volatility index (VIX) prediction.

The book never goes off-route and is always about generating more profits and cutting losses in options trading.

The Option Trader’s Hedge Fund

“The Option Trader’s Hedge Fund” is what happens when an options trading coach and a hedge fund manager work together. This book on options trading goes past explaining common options strategies to help you build a blueprint for minting profits from options.

It views options trading as a business and helps traders eliminate the large capital swings due to undisciplined moves. The authors demonstrate their knowledge with several real-life examples throughout this piece. A must-have if you love options.

Options Trading Crash Course

If you have dipped your toes into options trading, this book serves as a simple, easy-to-understand guide. Frank Richmond’s “Options Trading Crash Course” is an excellent pick if you are not entirely versed in options trading terminology.

The author clarifies complex concepts, offering practical strategies and real-world examples. What is interesting about the book is that you will find a separate chapter for every important minute topic, including “Strike Price selection,” “Volatility,” and “’Time Value.”

Whether you are a novice or seeking a refresher, this crash course provides a solid foundation to help you develop your razor-sharp trading edge.

Options Volatility and Pricing: Advanced Trading Strategies and Techniques

“Option Volatility and Pricing” by Sheldon Natenberg comprehensively scrutinizes options trading strategies and the nature of options price movements. In this book on options trading, Natenberg properly explains theoretical option pricing models, brimming with examples of particular trading strategies that have surfed market conditions.

You will not only understand how each strategy works and what makes it unique but also learn when to implement multiple strategies. Moreover, the author touches on less popular options techniques, including hedging to reduce risks and trading options on futures.

Overall, this is one of the best books on options trading if you want to firm your grip on the ins and outs of options trading.

Trading Options Greeks: How Time, Volatility, and Other Pricing Factors Drive Profits

This book is an excellent starting point if you want to master option Greeks. For instance, Delta represents the relation of the option’s price movement with that of the underlying stock. Likewise, Theta indicates the option’s time value.

Dan Passarelli, the book’s author, delivers on the promise of covering one of the most intricate trading concepts and boiling it down for readers. This book on options trading is packed with details about options Greeks and their impact on options values.

Passarelli has gone deep inside all these parameters that even seasoned options traders will find themselves referring to earlier chapters.

The 3 Best Option Trading Strategies for Beginners: The Ultimate Guide by Freeman Publications

In this three-part series written by experts at Freeman Publications, you will find an in-depth guide, in tandem with practical tips, to kick-start options trading. Geared primarily toward beginners, this book on options trading also suits more advanced traders who can refine their existing knowledge. It lays down choosing the correct strategy for your portfolio and managing risk while trading options. These strategies include covered calls, iron condors, and credit spreads.

Options Trading: The Bible: 4 in 1

Carl J. Merrill’s “Options Trading: The Bible. 4 in 1” teaches advanced strategies in a way that even beginners can understand. This 4-in-1 bundle kit comprises all the knowledge you need to start options trading profitably. As the world of options trading constantly evolves, the book boasts up-to-date content and effective strategies for generating passive income.

Additionally, Merrill has explained the psychological aspects of options trading, which is critical to becoming a successful options trader. His lucid explanations and real-world examples make complex concepts easy to follow. A must-read for those seeking a solid foundation and practical insights in this financial domain.

Options Trading For Dummies (Fourth Edition)

“Options Trading For Dummies” by Joe Duarte is a user-friendly guide catering to beginners in the options market. The author has penned this book on options traders with stock traders and investors in mind. He has broken down complex concepts into easily digestible content, covering basic strategies, risk management, and market analysis. The book’s practical approach, coupled with Duarte’s engaging writing style, makes it a go-to resource for those new to options trading.

Understanding Options

“Understanding Options” is a beginner’s handbook to options trading, arming you with a basic understanding of numerous critical concepts instead of handpicking a few. Author Michael Sincere has divided this book into four comprehensive sections to make it an engaging read covering from fundamentals to buy/sell strategies to advanced concepts to practical tips.

The book’s superpower is its intuitive “explain like I am five” style explanations. Sincere does not disappoint when it comes to boiling down the complex and confusing options trading. If you want to start with options trading or brush up your skills, “Understanding Options” is a clear beginner pick.

The Options Playbook

Most books on options trading provide surface-level information. Fortunately, Brian Overby’s “The Options Playbook” digs deeper into each strategy’s options strategies and multiple perspectives. Plus, it underlines common mistakes that beginners can easily keep at bay.

The book covers risk management, which is crucial, especially for newbies who have never experienced market fluctuations. Moreover, Overby has illustrated every concept with easy-to-understand images.

This book has garnered applauds for its clarity and practical insights, making it an indispensable guide for options traders.

Trading Options as a Professional

“Trading Options as a Professional” makes no bones about the fact that it serves a professional audience. The author, James Bittman, shares tons of insights based on 20+ years of stock market experience. He zooms in on the practical application of concepts, including pricing dividends and synthetics, among others, in a style that is easy to digest.

The book entails topics as basic as using objectivity in all investment decisions, improving trade selection, and creating market prediction techniques. Also, he has touched on the concept of market behavior prediction.

All in all, this book on options trading offers a crystal-clear idea of the difference between an investor who calculates and a trader who speculates.

Turning Pages, Turning Profits

This listicle of the best books on options trading serves a diverse experience level among the trader’s community. The authors have earned a good reputation in the field of financial markets.

Of course, some books might seem a bit dry, but they are written in a narrative format to keep you engaged and your eyes on the pages. So, shrug off all the fear about options trading, pick your favorite, and start studying with your heart and soul.

Remember, books lay the groundwork, but mentors offer the essential guidance and real-world insights necessary to navigate options trading complexities effectively.

FAQ

What are the top books for beginners in options trading?

“Understanding Options,” “Options Trading For Dummies,” and “The Ultimate Options Trading Strategy Guide for Beginners” are excellent reads with a beginner-friendly approach. These books on options trading cover essential concepts, strategies, and practical tips for those starting their options trading journey.

Which books provide in-depth strategies for advanced options traders?

Valuable reads, including “Trading Options as a Professional,” “Option Volatility and Pricing,” and “Exit Strategies for Covered Call Writing,” are ideal for advanced options traders. These books on options trading contribute unique perspectives and advanced strategies for seasoned traders.

Can you recommend books that focus on risk management in options trading?

Joe Duarte’s “Options Trading For Dummies” provides a concise guide covering risk management essentials. Similarly, Freeman Publications’ “The 3 Best Option Trading Strategies for Beginners” emphasizes risk-aware strategies for beginners. Furthermore, “The Options Playbook” by Brian Overby focuses on the vital aspects of volatility, aiding in effective risk analysis.

What are the best books for learning about options trading strategies?

Renowned works such as “Options as a Strategic Investment” and “Option Volatility and Pricing” offer in-depth insights into foundational principles. Moreover, “The Option Trader’s Hedge Fund” and “Trading Options Greeks” cover advanced techniques, while “Options Trading Crash Course” and “Fundamentals of Futures and Options Markets” serve as excellent guides. Practical insights in “Options Trading For Dummies” and “Options Trading: The Bible: 4 in 1” make their essential reads.

Are there any books that cover both basic and advanced options trading concepts?

Books on options trading, including “The 3 Best Option Trading Strategies for Beginners,” “Options Volatility and Pricing: Advanced Trading Strategies and Techniques,” and “Options Trading Crash Course.”

What are some books that focus on technical analysis for options trading?

These books on options trading focus on technical analysis. John C. Hull’s “Fundamentals of Futures and Options Markets” provides a solid foundation for understanding options and their markets. “Options Trading Crash Course” by Frank Richmond serves as a quick yet comprehensive guide for beginners. Additionally, “The Option Trader’s Hedge Fund” offers practical guidance for hedging strategies.

Can you suggest books that offer insights into successful options trading psychology?

Consider these books for a deeper understanding of successful options trading psychology. Carl J. Merrill’s “Options Trading: The Bible. 4 in 1” provides foundational insights into the psychological aspects of trading. “Trading Options Greeks” delves into how time and volatility impact decision-making. Additionally, “The Option Trader’s Hedge Fund” offers perspectives on managing emotions effectively.

What are the top options trading books for building a comprehensive knowledge base?

For building a comprehensive knowledge base in options trading, dive into classics like “Options as a Strategic Investment” by Lawrence McMillan, offering in-depth insights and strategies. Additionally, “The Bible of Options Strategies” by Guy Cohen provides an extensive collection of strategies. Lastly, “Trading Options Greeks” by Dan Passarelli delivers a thorough understanding of option pricing factors. These books collectively offer a solid foundation, combining theory and practical insights for a well-rounded knowledge of options trading.

Which books provide practical examples and case studies for options trading?

Several books offer practical case studies for mastering options trading. “Options as a Strategic Investment” by Lawrence McMillan is renowned for its real-world applications. Sheldon Natenberg’s “Option Volatility and Pricing” provides comprehensive case studies, while “The Bible of Options Strategies” by Guy Cohen is a practical guide featuring numerous examples.

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