Over the years, I’ve read a lot of books on the stock market and options. Some were very helpful, and others, not so much. The same is true with websites. There are many sites that claim to help you, but many charge fees for their services. The goal of this site is to provide information without cost or pressure to sign up for some expensive program. This page is designed to share my favorite resources. If you have suggestions for others, leave a comment at the bottom of the page.
Website Resources
CBOE.com: The Chicago Board of Options Exchange is where options started, and is the home of many products that are the foundation of options trading. There is extensive information on this site, and it is very user friendly. It can be used it as a data source, with a large database of downloadable data. And it is all free!
TastyLive.com: Tasty Live is a live option training and information site. It features live programming during US market hours every day the market is open. It has a mix of different personalities and has segments focused on all levels of experience, from beginner to advanced trader. It advocates strategies mostly focused on selling options, not buying. All suggested trade strategies are back by numerous back-tested studies of market data. I agree with almost all of the approaches they advocate. All programs are archived for later access. The site also has an iPhone app, and Apple TV app. Best of all, everything is free! Tasty Live is closely tied to Tasty Trade, formerly called TastyWorks brokers, which have led the march to eliminating commissions and innovative trading platforms.
OptionTradingTips.com: As mentioned on the Data Sources page, this site has a free downloadable spreadsheet to allow the user to model option pricing and Greeks based on the Black-Scholes option model. There are other resources on the site as well, some that cost money, but the spreadsheet is free to download. There are no big secrets to it- the macros that run the spreadsheet are not locked and can be reviewed at any time.
Book Resources
McMillan on Options by Lawrence G. McMillan: Many people consider this book to be the “bible” of options. This book was written 20 years ago, and while dated in some ways, it still applies to the market today. It is quite long at around 600 pages, but there are several sections that are simply outstanding. Even today, after 20 years many approaches explained by McMillan are not broadly adopted by many traders. In particular the sections on Trading Implied Volatility, The Greeks, Using Probability and Statistics in Volatility Trading, and Expected Return are full of great insights and examples. A couple of trades that he covers in great detail are Calendar Spreads for a variety of situations using extra legs as a hedge and profit generator, plus the use of the Back Spread in low Implied Volatility environments. I recently came across a pitch for an “unique” option strategy that a team would teach for several hundred dollars that turned out to be the Back Spread that McMillan advocated decades ago.
Fair warning on the book. It is dated and long. When it was written, stocks and options were priced in fractions- quarters, eighths, sixteenths. Today everything is decimals, priced to the penny. The book also has long sections on futures that drag on- I suggest skipping through unless you are extremely familiar with futures. It really isn’t a beginner book- there are better books to read first. But when you are ready, this book takes trading and the use of Greeks to a new level.
Get Rich with Options: Four Winning Strategies Straight from the Exchange Floor by Lee Lowell: This is the book that opened my eyes to the possibilities of option trading. I came across it at a book store and started reading and couldn’t put it down. The book focuses on four trades- the covered call, cash secured put, buying deep in the money calls, and credit spreads. The premise is that these are better trades than any other type of option trade. The book shows how these trades are high probability for profit trades, and contrasts them to others that aren’t. Conceptually, it is a great book and easy to read. My only critique is that it doesn’t give very specific advice on how far in/out of the money to trade, or what expirations, or how to manage trades after you place them.
The Unlucky Investor’s Guide to Options Trading by Julia Spina: This is the book on how and why to trade the “Tasty Way,” following the approaches suggested on TastyLive.com, as described above. If you open an account of about any size at TastyTrade.com, I think they’ll send you a copy for free. Or you can buy it on Amazon. The book dives into the math of options without getting too crazy and talks through the key elements of option trading. I’d label this as an intermediate level options book. Julia has degrees in engineering, math, and physics and works for Tasty.
The Stock Trader’s Almanac by Jeffrey Hirsch: Each fall since the early 1970’s Mr. Hirsch issues a new version of this classic reference for the coming year. It is chock full of data based on patterns observed over decades of research. While history doesn’t predict the future, this almanac provides surprisingly helpful information that tends to be directionally correct. Among its well-know creations are the Santa Claus Rally, the January Effect, and the Presidential Election Cycle. While this is focused more on the overall market than on options, there is significant attention given to options expirations and key market holidays that are important to option traders.
Community
Often it helps to meet and learn from other traders. It’s hard because so few people trade options and most people have no understanding of any part of options trading. I wrote a post on the Power of Community that may help.
This Site
One thing that I’ve struggled to find in any book or site is how to determine optimal strike prices and expirations for different strategies, and how to manage winners and losers for the best outcome. That’s okay, because while there are some limited sources for that, I’ve had to figure it out myself, which is one reason this site exists.
I’m always looking for great resources to learn from. If you have suggestions, leave a comment below.
Hi C Allen,
I find your options trading articles very interesting.
I think I can give you some new ideas to advance the whole to “the next level”.
Is it possible to contact you privately via email or direct mail?
Thx
Sure, I think there is an email address displayed with this comment that you can send a private email to. But I already get about 10 emails a days from different people trying to sell me services to improve the SEO and all kinds of other metrics for the site. This site isn’t a money maker, and there is no plan to spend money on it to get it to be a money maker.
The site gets a decent amount of traffic from traders trying to learn about options without pressure to buy services. Analytics tells me that most readers spend several minutes on each page, which is almost unheard of in today’s short attention span society.