Good Books on Investing and Trading
The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns [Hardcover] by John C. Bogle (Author)
Learn to Earn: A Beginner’s Guide to the Basics of Investing and Business [Hardcover] by Peter Lynch (Author), John Rothchild (Author)
One Up On Wall Street : How To Use What You Already Know To Make Money In The Market [Paperback] by Peter Lynch (Author), John Rothchild (Contributor)
Investing For Dummies [Paperback] by Eric Tyson (Author)
The Neatest Little Guide to Stock Market Investing [Paperback] by Jason Kelly (Author)
Candlestick Charting Explained: Timeless Techniques for Trading Stocks and Futures [Paperback] by Gregory Morris (Author)
The Visual Investor: How to Spot Market Trends [Hardcover] by John J. Murphy (Author)
Intermarket Analysis: Profiting from Global Market Relationships [Hardcover] by John J. Murphy (Author)
Trading for a Living: Psychology, Trading Tactics, Money Management [Hardcover] by Alexander Elder (Author)
Good Books to Learn Options Trading
Traders who are serious about their trading should treat their trading as a business and learn to trade like professionals do. The following are a collection of excellent books on options trading – the first five, in my opinion, are ‘must read‘ books! The first four are from the RandomWalk Trading collection, and have step-by-step instructions on the practical aspects of placing a trade with detailed examples. Although not inexpensive, the books contain more specific and detailed information than I have seen shared by instructors in some 3-day (few thousand dollar) seminars on the same topics. The fifth is a short, but highly instructive book on how to avoid making some very crucial and costly mistakes.
This very easy to read and understand manual is perfect for everyone, from newbies to the most sophisticated traders. Besides reviewing the basics of stock options, this book also covers some sophisticated techniques (like protective puts and collars) to help ‘hedge’ your entire portfolio of stocks, mutual funds with index options. What is impressive about this book is that it has step-by-step instructions including specific criteria to help guide you to find the perfect hedge and collar for your stock positions. Knowing how to protect your portfolio with the right hedge in today’s volatile markets will save you the cost of this book many times over!
Time spreads (a.k.a. calendar spreads) are some of the most popular strategies in the options world. This manual offers step-by-step instruction on how to place and manage long and short time spreads in order to maximize the effect that time decay and volatility have on the positions. The manual also contains sections covering early exercise and assignment, and an appendix on basic synthetic positions to help you understand your trades should you get assigned.
This is a more advanced manual for experienced traders who wish to taking their trading to the ‘next level’ as well as newbies who are committed to learn more about the science behind the art of options trading. This book dissects and demystifies the most confusing of all option concepts – the Greeks (Delta, Gamma, Theta, Vega, and Rho). Mastering the contents of this book will help you strategize when a trade goes against you. Like the other books, the material is presented in an easy to read format with practical applications of the Greeks. As noted by RandomWalk, “this is the analytical trader’s quantitative manual to trading; yet, it is presented so that anyone without an advanced math background can understand.”
This book covers an advanced strategy that is traded by only a select few professional traders on the floor (and often incorrectly) known as the “ BWB” or Broken Wing Butterfly. In the manual, the author takes you from the option basics to a detailed description on one of the most powerful strategies you can ever learn. This book teaches you how to put on trades where there could be virtually no risk of loss (provided the market doesn’t crash more than 800 Dow points in a day; and even then, there is remedy for that should it occur). This strategy can be done in any market condition and blows the doors off any concept of risk–reward you may have ever learned before.
5. The Four Biggest Mistakes in Option Trading, 2nd Edition (Trade Secrets) by Jay Kaeppel (Author)
This small book is packed with much essential information to help traders stay on the right side of a trade. Jay Kaeppel writes in a very easy-to-understand style that ‘cuts to the chase’ and shares the secrets that most traders only learn from experience (from the school of ‘Hard Knocks’). Following Warren Buffet’s guiding principles and first rule ‘Don’t lose money’ – he shows traders how to avoid losing money by avoiding the most common and costly mistakes that most, if not all, traders make when they first start trading options. Unfortunately, not all traders learn these lessons, and some continue losing money they could easily save, if they had read Kaeppel’s book. This book contains details on volatility calculations, risk/reward relationships, calendar spreads, etc. with real world examples with varying scenarios depicted visually with graphs and tables to better illustrate Kaeppel s concepts.
Other excellent books on options trading include:-
6. The Option Trader’s Guide to Probability, Volatility and Timing (A Marketplace Book) by Jay Kaeppel (Author).
7. Option Volatility & Pricing: Advanced Trading Strategies and Techniques by Sheldon Natenberg (Author)
8. McMillan on Options, Second Edition (Wiley Trading) by Lawrence G. McMillan (Author)
General Investing Websites
Website resources on Stock Charting and Trading Strategies
Useful Websites on Options