Only the very best books to learn and master options trading from: πππ
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I mined reddit for their most recommended books to study options trading and related concepts from.
Reddit is a goldmine, and with this topic, it didn't disappoint.
Reddit is a goldmine, and with this topic, it didn't disappoint.
**Basic to Intermediate**
1/ Option Volatility & Pricing by Sheldon Natenberg
Considered the Bible for options trading and recommended reading by almost all options prop desks.
1/ Option Volatility & Pricing by Sheldon Natenberg
Considered the Bible for options trading and recommended reading by almost all options prop desks.
2/ The option trader's hedge fund:
Discusses practical trades, volatility modeling, hedging/defending, etc.
There are some interesting stories from an early-2000s-ex-market-maker too.
Discusses practical trades, volatility modeling, hedging/defending, etc.
There are some interesting stories from an early-2000s-ex-market-maker too.
3/ The Bible of Option Strategies
Describes various strategies and classifies them by risk, approach, difficulty, etc.
Describes various strategies and classifies them by risk, approach, difficulty, etc.
4/ Options as a Strategic Investment
Second most recommended book on reddit for Options.
Second most recommended book on reddit for Options.
**Intermediate to Advanced**
1/ Volatility Trading
Focus on the chapters on psychological biases, money management, and Kelly.
1/ Volatility Trading
Focus on the chapters on psychological biases, money management, and Kelly.
2/ Dynamic Hedging
Focus on the chapters on vol surface, shadow greeks, alpha, and arbitrage.
A very important book for options based trading practitioners.
Focus on the chapters on vol surface, shadow greeks, alpha, and arbitrage.
A very important book for options based trading practitioners.
3/ Trading Options as a Professional
Focus on the chapters on pricing synthetics, dividends, boxes, flying off options, and managing bids/offers.
Author is an ex market-maker from the floor trading days.
Focus on the chapters on pricing synthetics, dividends, boxes, flying off options, and managing bids/offers.
Author is an ex market-maker from the floor trading days.
4/ Option Gamma Trading
Among the best resources to learn in depth about gamma and its effects.
The book explains gamma and its role in exposure to realized volatility, scalping, profitability, and time.
Among the best resources to learn in depth about gamma and its effects.
The book explains gamma and its role in exposure to realized volatility, scalping, profitability, and time.
5/ Trading Volatility
The best resource for institutional option trading, skew, correlation, and term structure trading.
The best resource for institutional option trading, skew, correlation, and term structure trading.
6/ Exploiting Earnings Volatility
This book teaches about vol surface, how it changes around earnings, and how vol should move as we approach the event.
A good book on event-driven options trading.
Make use of the excels given with the book and work around the ideas given.
This book teaches about vol surface, how it changes around earnings, and how vol should move as we approach the event.
A good book on event-driven options trading.
Make use of the excels given with the book and work around the ideas given.
**Advanced to Institutional**
These books are quite advanced, and aren't much useful for retail traders.
1/ Volatility SmileΒ by Emanuel Derman
These books are quite advanced, and aren't much useful for retail traders.
1/ Volatility SmileΒ by Emanuel Derman
2/ Volatility Surface by Jim Gatheral
4/ Financial Mathematics of Market Liquidity by Olivier Gueant
You can check these books out if you're going into work with an institutional options desk/market maker.
I have made a cheatsheet of sorts for this book list that you can save.
I have made a cheatsheet of sorts for this book list that you can save.
As with everything, books will teach you the concepts.
You need to do actual trading and experience the theory practically and improvise along the way.
Before you put in any money, observe with paper trades for a year at least and then start using real money with options.
You need to do actual trading and experience the theory practically and improvise along the way.
Before you put in any money, observe with paper trades for a year at least and then start using real money with options.
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