McMillan on Options (Wiley Trading)

This is an extensive manual about the ins and outs of option trading. While much of the examples are dated over twenty years ago, the principles still hold true. The explanation of different strategies and the use of the Greeks for evaluation of each strategy is more thorough than I've seen anywhere else. The book is a bit long. Many examples go on for several pages. Some concepts are a bit much to determine a practical use. Keep in mind that this is not a book for beginners. This is for readers with a decent background in trading and some experience in options. It also is not a book to read once and set aside. I found myself flipping back a number of times to review material that I didn't fully grasp the first time through. I also noticed a lot of subtlety of important factors when I read through sections again. Often I would try an approach presented and have some success, but then realize that there was more to the strategy that I missed. With additional insight I could be more consistent in successful trading. Two particularly helpful sections were the explanations of the use of back spreads, and gamma neutral calendar spreads. I had not encountered these approaches before and they are both very powerful in low volatility environments. I see this book as one I will likely refer back to periodically to keep learning.

Excellent book.

Filled with great examples, this book brought me from practically no knowledge of options up to a point where I am now comfortable using options as another investment strategy. A great read, McMillan builds your knowledge steadily. Even if you decide you may not actually trade options, knowing the signals from the market by following options is another valuable tool for the investor.

I own a fair number of books on options. Some are better than others, most have a few nuggets if you dig for them. McMillan's Options as a Strategic Investment was one of my earliest purchases and I appreciated it for its academic quality. This tome is somewhat more challenging a read, is directed to individuals who want a bit more thorough analysis of option strategies and is probably more useful to very active traders who are interested in sophisticated strategies. I found it interesting and educational, but if this is your first options book, it is probably the wrong place to start. The most important single thing I learned about option trading has been that owning shares of stock is essentially the economic equivalent of simultaneously owning a long call (that is, owning a call) and being short a put (that is, having sold a put). Anyone who is about to start trading options is told that being a short put is a dangerous situation, yet it is basically inherent in owning stock due to the equivalency just described. Understand that and options become more attractive and understandable as away to invest while limiting risk and enjoying upside potential and, more importantly, why it is worth reading books such as this and those by Guy Cohen to educate yourself.

McMillan does an excellent job of explaining options and its characteristics. He delves into the many different applications as well as the different strategies. More importantly, he gives a thorough analysis of the strategies as well as the concepts. This is a book for a trader or investor who wants to gain a deep and thorough understanding of options and what it can do for the bottom line. His book is one of the best and most comprehensive of stock and futures options. You won't regret buying it.