The Rookies Guide to Options

I occasionally mention, but never push my books on this blog.  Today is an exception.

I find myself in a very frustrating situation.  Obviously there are many places to learn about options, but I've received enough questions to recognize that people who have been trading options for a few months or years, should not be to buying and selling options with real money.  Too many fail to understand the most basic concepts of how options work.  I don't want to see people losing money just because someone on whom they depended, failed to provide a satisfactory education. 

The Rookie's Guide to Options: The Beginner's Handbook of Trading Equity Options was written to fill that void.

A recent review was very complimentary.

The book is written in language that is clear and easy to understand.

The style is conversational, and I speak directly to the reader.

The book contains everything you need to know to begin using options.  This is not a complete course containing every piece of information, but it contains more than enough to teach you to be a successful trader/investor.  And if you are concerned about insuring the value of your portfolio after living through last year's market debacle, you'll learn how to accomplish that. 

There's plenty of extra information for those with inquiring minds.

Although the book is targeted to rookies, there is enough advanced material that this book will be useful for years to come.  Thus, it's appealing for readers who feel they don't quite 'get it' and want clarification on many points.

Examples are provided, in detail.  I lead the reader through the decision-making process when entering into a trade.  The reader  reads my thoughts as I explain the process that allows me to select a specific option for a given strategy.  This is a unique learning method that allows you to immediately recognize where you agree and disagree with my trading style.  That's advantageous because it helps you quickly discover your own style and comfort zone.  I don't ever believe there is a single 'best' option to trade because so much depends on the investment goals and investing style of the individual investor.

I look at many alternatives when considering a trade, pointing out which would be more suitable for the conservative or risky trader.   A total of six strategies are covered, including iron condors and double diagonals.

One of the major attributes of the book is the constant reminder of my basic premise:  risk management is the key to long-term success when trading options.  I illustrate several ideas for managing risk by adjusting positions, but because you learn to think for yourselves, you will discover other ways to manage risk (several are discussed in previous blog posts).

You can download a free e-version of the book, that contains a very short sample from each chapter.


5 Responses to The Rookies Guide to Options

  1. Dear Mark
    I found your book was great,very practicle and I understood almost everything despite my poor english. I recommend it for rookies (and not so rookies) that want to learn how to do mostly with Iron condors, but I find the book needs sthadistics of your system, ratios of winning and loosing ops, how much you earn per op. … because it should be a good way to show this kind of trading works.

  2. Mark Wolfinger 05/21/2009 at 7:43 AM #

    Thank you.
    I agree that a track record of trades could be useful, but the problem is that I don’t have a ‘system.’
    In writing the book, my emphasis is on explaining to you, and every other reader, how to make changes to each example trade – changes that are appropriate for your individual comfort zone.
    If I choose to write a covered call, you may prefer to write a covered call with a higher strike price, or using a different stock. When you do that, your result will be very different than mine. You may decide to hold the position to expiration, when I exit the trade two weeks before expiration. It’s those differences that make it impossible to publish my results as part of a system.
    I want you to learn to think for yourself – and when you do that, my results won’t resemble yours – or that of any reader.
    Here’s an extreme example: When I first began trading iron condors, I got lucky with 14 consecutive profitable months. I don’t ever expect to do that agin. The way I trade iron condors, periodic losses are inevitable. If I published that 14 month streak as part of a ‘system’ that would not be the right thing to do.
    I appreciate your input, but it’s not something I can do.

  3. TR 05/21/2009 at 6:54 PM #

    I just wanted to add in a comment endorsing your book. It was the 2nd options book I read (my 1st was your other book “create your own hedge fund”) and I absolutely loved it. I have read it a couple of times and still refer to it from time to time. It was simple to understand and practical.
    The book gave me all the information I needed to conservatively start trading options. It has helped me tremendously in my investing.
    A couple of months after I bought your book I picked up another book written by an another author and I must say I was thoroughly disappointed. Reading your books had significantly “raised the bar” in terms of my expectations for a good options trading manual.
    Thank you for writing your book and thank you for this blog. They are both very helpful.

  4. Mark,
    Thanks for all your material and insights I have found them very helpful. I have been trading for awhile now, but as I have been learning I have kept the trades at lower values. As I get more experienced and comfortable moving larger sums of money I am not sure what trading service to use. What is the best way to choose a institution ensure that they offer all the services I need? Many make it complicated to sell calls and puts.

  5. Mark Wolfinger 05/22/2009 at 7:48 AM #

    Do you have access to brokers that operate in the US, or must you use brokers where you are located?
    One suggestion: Call customer service and ask questions. Then try to use their services online – in a paper trading account.
    Interactive Brokers operates around the world and they should offer everything you need, at a reasonable cost.
    Perhaps readers who live in Hong Kong (is that where you are located?) can offer suggestions.
    It should be easy to buy and sell calls and puts. Are you trading the Asian markets?