Options as a Strategic Investment: Fifth Edition

I bought the 2nd edition when it was published in 1988. It is the best reference there is on options in my opinion and should have a place in every serious options traders’s library. I just bought the 5th edition published in 2012 which is a whopping 1000+ pages, over 300 more than the 2nd edition. It has been upgraded and modernized to reflect significant changes in the options markets over the past 35+ years. It is not meant to be read cover to cover, although I’m sure some options braniacs do. It also may be over the head of the novice or someone who has never traded options before. If you are new to options, there are a plethora of videos for beginners and that is where I would suggest you start. While it does start with basic options fundamentals, it quickly delves into level II and level III options strategies. The new edition covers the newer advanced options strategies, how options pricing has changed, index options, futures options, new margin requirements and tax treatment of options income. I am retired and my day job is to actively manage the family retirement portfolios. I use options mainly for high probability low risk passive income and hedging. Options as a Strategic Investment is an indispensable reference resource for any serious options trader, professional, or someone who actively manages their growth or retirement portfolio.

This is the ultimate book on options and well worth the cost and effort to read it. Few people will ever want to read the entire book. Read the sections that match your option interest and investment strategy. An option position can be a safe and secure part of your investment portfolio management, adding income, protecting gains and avoiding heavy losses. At the same time an option position can be very risky with the possibility for unlimited losses. There's lots of hype floating around on making big money trading options. Beware the hype. This is not that book. This book has all the basics, read those sections. Go back and read them again. Explore the more complicated strategies more slowly. If you want to dig into real detail and the mathematics, it's there if you want it. This book would be the obvious choice for a two semester sequence as part of an undergraduate or graduate fiance program. At the same time if the extent of your interest is limited to buying puts and calls, generating income through covered calls and maybe buying stocks at lower prices through short puts, this book should still be in your library. If you have enough money to feel comfortable with the more risky aspects of options (100% losses sometimes) you certainly can afford to buy this book. In spite of the detail provided, each chapter is well written and not difficult to digest. It's the totality of the subject and the wide variety of trading strategies, some of which are complex and should be undertaken only by those with discipline and self confidence. I found this book a perfect companion to pursuing options trading through a free, on-line program offered by the Chicago Board of Options Exchange (CBOE). This is a program of on-line self training, with a certification test for each training module and a series of comprehensive tests for the basic, intermediate and advanced certification level I have completed most of the modules and concluded that many of the more complex strategies should be left to the real experts. Again, like this book, go with what you are comfortable with.

This should not be your first book on options. It will demoralize and kill your enthusiasm if you do not minimally have a working knowledge of puts/calls. If you have that basic knowledge, and if you really want to learn about options, this is the approved textbook. What Frank J. Fabozzi is to Mortgage Backed Securities (MBS) and Asset Backed Securities (ABS), Lawrence McMillan is to Exchange Traded Options. This book is not a particularly fun read nor a breezy one. It is not a get-rich-quick program. However, it is a mountain of useful, detailed knowledge. You will approach this book like you would a college class - graduate level. It will take work and dedication to accomplish. You do not need to a rocket scientist to understand what McMillan is teaching you. You need patience. You'll get it - he'll teach you. You will be rewarded with an understanding of the capital markets that very few comprehend. From that point, you'll probably look with disdain upon so many of those books that offer systems or guides to the options market. You will know more than those authors, and you can create your own system - with Confidence. I am an expert in options (exchange and OTC), swaps, derivatives, MBS, and CLOs, and I recommend this book.

I've read every search result online about options trading, and learned enough to start messing around with it. I've been trading them for a few months with a small account. Then I bought this book and realized how much I don't know. Just a few things I have learned from this book: - The inner workings of the options market, including what happens behind the scenes when an option expires or gets exercised. - The best explanation I've ever read of time value decay and how it relates to volatility of the underlying stock - Why you probably should trade short term options instead of long term - How to calculate a realistic estimate of risk vs. reward of a potential option play - Different ways of writing covered calls depending on how aggressive or conservative you want to be - How to compare different options from the available expiration dates and strike prices - The pros and cons between writing an in-the-money option or an out-of-the-money option. - How dividends can increase the risk of being assigned when writing a call option - How to roll down a covered call option to maneuver your way out of a losing stock position. I've learned all of this in the first 60 pages, and this book is over 1,000 pages. This book has paid for itself already with what I learned. Despite being jam packed with information, it is actually very approachable for anyone with the most basic knowledge of options trading. I'm not kidding, buy this book!

I've read a lot of options books. Most of them are horrible and basic. Although this book is dated (and as a result the discussion of commissions is over-emphasized), it's fantastic to understand the concepts involved with options and talks about real-world exact step-by-step actions to take for entering, managing, and exiting options positions. It has helped me expand my thinking around how options can be used. Highly recomomend. Only getting 4 stars because the commission discussion is dated, but otherwise it's fantastic.

My first introduction to this book was when the 4th edition just came out. I got the 5th edition because it has new material and given the low cost, it was a no-brainer. Seriously, this tome has about a 1000 pages chock full of relevant information and is more comprehensive than just about anything else. It may not be perfect but then there isn't such a thing in my collection of options books. Authors like Natenberg, Augen and others write excellent books on some very specific areas of options and there are also highly specialized books covering a single strategy (Benklifa on Iron Condors for example). None are perfect but that does not detract from their usefulness. When I am looking to read up on an option strategy, I usually do the convenient thing and search the Internet. Invariably, I need more detail and McMillan delivers. The reason I say this is the go-to for most options traders is that if you want a foundation in options theory delivered in plain language with an easy to understand discussion on just about every option strategy, this book is it. If you want to delve deep into theoretical models, probability distributions, and the financial theory of derivatives, there are other books. Most option traders want (and need) the former leaving the later to the academics.

This is a great book to learn Options trading. For all the nerds that don't want to pay a few bucks for one of the many options trading apps out there (OptionStrat, Barchart, etc.) to predict returns, probabilities and volatility, this book has all the theory you need to build your own spreadsheet or program. The book is geared towards investing with Options, not speculating. This will not teach you how to 0Day trade, but does acknowledge the practice and explain the risks in those types of strategies. It goes into great detail about all the different variations of call/put combinations, what situations warrant them for max effectiveness, and how to properly unwind should the stock move against you. This will not teach you what stocks to pick, but it does help you recognize advantageous situations and which strategy to employ for that situation to get the best probability for profit. Overall, it's a great reference and will help build confidence to employ strategies you may have shied away from in the past because you didn't understand all the risks.

The process now days of describing a good book as "The Bible of %^%&" has in my opinion gotten way ahead of itself, so when I heard that being said of this book in other reviews I did not put much credit in it. As soon as I got the book in the mail however, I could tell there may be something to it once the secretary bringing the box asked if I had bricks delivered!! The book is massive!! Obviously I have not gotten through it all yet, but already I can tell that this IS THE BIBLE OF OPTIONS. Just skimming through it so far I am amazed at the content. If there is any information or techniques on options that are not in this book I would be truly amazed. The author has done an amazing job on this, and I know it will be a valuable reference for years to come, and have a permanent spot on my desk for quick reference, until the next edition comes out that is!! If you are interested in learning, or expanding your knowledge of options, BUY THIS BOOK, YOU WILL NOT BE DISAPOINTED!!!!

Title says it all. Haven’t finished reading it yet and so far so good 10/10

This book is universally hailed as the "bible of options trading." This comprehensive reference is absolutely indispensable for anyone serious about mastering the options market. It covers all modern strategies and market innovations, from basic calls and puts to complex volatility derivatives. It provides unparalleled depth, explaining the mechanics, ideal market conditions, and risks of every strategy. Simply put, this book is the definitive, essential resource for turning theoretical knowledge into strategic, profitable option investing.

Thick book, very informative and easy to read.

オプション取引のバイブルとして1冊は持っておきたい本。 オプション取引の中級レベルから上級者レベルが対象。 「現物オプション」だけでなく「先物オプション」まで網羅されている。 「先物オプション」について書かれた書籍は稀有なので重宝すべき。 オプション取引では、その構造から「買い」よりも「売り」に優位性があると様々な書籍で書かれているが、その常識が覆される内容が満載。様々なオプション戦略の具体例が示されていて、各ポジションのメリット＆ディメリットが理解できる。また、相場変動によるポジション調整のフォローアップまで詳細に解説されている。

Es un libro no apto para principiantes. No tiene visión de inversión a corto plazo. No es para vendedores de weekly's. Explica cada estrategia y las follow up actions e ideas de selección de posiciones. Creo que merece la pena.