I’ve been wanting to learn more about options ever since I met a friend of mine who was an option master. He would often talk about how he placed option trades based on earnings and shared his wins and losses.
I first learned a bit about options during my internship with a broker-dealer. Then when I wanted to learn more, I turned to the free online courses offered by the Chicago Board of Options Exchange (CBOE). They offer webinars and more on everything from beginner option trading to advanced strategies. I need to beef up my knowledge on advanced option trading, which is why I was pretty excited to see a book on that very topic.
Option Spread Trading: A Comprehensive Guide to Strategies and Tactics
Option Spread Trading first caught my eye because it was written by an instructor at the CBOE, Russell Rhoads.
It is definitely a comprehensive guide. The book covers the basics of options on a level that any beginner can understand. For those of us that are visual learners, there are pictures and graphs to illustrate just about every strategy referenced.
The book also covers advanced option topics such as the greeks, and delta neutral trading. Then you will get into the meat of the subject. The option spread strategies covered include Bull Spreads, Bear Spreads, Straddles, Butterfly Spreads, Condor Spreads, Ratio Spreads and more. If you don’t know exactly how to start your trade, the author covers how to ‘leg’ into a trade.
As a reference guide, this book is meant to be read in numerous sittings. You can pick one topic to focus on first then skip to a new topic. The way the book is structured, once you know the basics, you can jump directly to the strategy that interests you the most.
If you’ve ever been interested in trading options on earnings, that is covered right away in the chapter on Straddles. Each strategy comes with a chart detailing expected payoff and break-even points based on certain price levels.
After reading it I feel much more comfortable getting into options trading and I am looking forward to testing out these strategies as I become more familiar with each one.
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