To figure out where to start I always begin with a simple google search. There is such a wealth of knowledge floating around out there that it is hard to ignore when specific authorities show up the most in your online search results. The trick is to get past the advertisements and sites that are obviously trying to sell you get rich quick schemes. I was looking for a starting point that did a couple of things, (1) teach the basics of options trading to help build our foundational skills; and (2) teach strategies that are not promising crazy instantaneous returns but rather have a long-term approach that shows how to reduce risk.
The reason I like to focus on foundational skills is that you can get yourself into a lot of trouble by jumping into more advanced techniques before learning the basics. I always like to say that the scariest thing while learning a new skill where risk is involved is that you do not know what you do not know. In other words, if there is something important to learn that can prevent you from losing a lot of money, it is scary that you could bypass learning about that foundational skill because you did not know the skill even existed in the first place. And the reason I like to focus on long-term and risk-reducing techniques is that there are no get rich quick schemes in life (unless you are stealing from or taking advantage of other people). The things that pan out and create true value only come with time and effort. If someone is trying to tell you otherwise they are probably giving you a line to sell something quick for their own personal.
Throughout my online search, I found the following quotes about Options As A Strategic Investment by Lawrence G. McMillan. In addition to these good quotes, I always like to read some of the negative feedback on Amazon before buying a book. In this situation, the negative feedback seemed to be about lack of change in the new version and to be careful about making sure it is the real version, not the study guide.
“McMillan’s options books are biblical in reference to your options knowledge[.]”
- This quote is from Jim Cramer’s website The Street, which is a great resource for news and investing in general. Jim Cramer is an authority in the investing world and has also written some great books on investing for the long term.
“Options As A Strategic Investment by Lawrence G. McMillan is really good. It covers all the basics in the beginning by explaining calls and puts. Moves on to various option strategies involving calls and puts. Then goes deeper into complex strategies using options on derivatives and volatility. It’s probably one of the best books on options and is fairly easy to follow as you read along.”
- This quote is from an online forum Quora. I usually like to look at a few forums just to see what people are saying about what to read when they do not have as much incentive to do so like authority sites do.
“This is the bible of options trading. It’s tough to get through and sometimes sections won’t apply to your trading style, but it’s great to have on hand as a reference, especially if you have a longer-term timeframe in mind.”
- This quote from “Investing With Options” was helpful because it discussed the type of investing I am looking for in a book, the long-term timeframe.
“Options as a Strategic Investment by Lawrence McMillans is a great resource to help novice investors wrap their heads around the world of options investing. It covers the basics of how options work and offers numerous strategies for a variety of different markets. The newest edition of this guide showcases a variety of options trading products now available, as well as contains a section on volatility trading. If you’re thinking of using puts and calls, read this book first.”
- This quote from “Minyanville” was also helpful because it discussed the contents of the book a little. As it discusses, I look forward to learning about some of the products we can use to trade options, but that will come after the basics. I also plan on doing some research on simulation software, but once again, one step at a time.
The other book that most frequently showed up in my search was Option Volatility and Pricing: Advanced Trading Strategies and Techniques by Sheldon Natenberg. Because this was also highly recommended during my search as a book on the basics I will keep it in mind for a next step in the learning process. On the other hand, if Options as a Strategic Investment teaches the basics well, we may move on to a more advanced book on technical analysis or something that reveals itself to us during our learning process.