The Conservative Investor's Guide to Trading Options

Assumes you know nothing and does an exemplary job explaining the fundamentals and foundational strategies you'll want to know trading options, like strike price selection, covered calls, puts as insurance, straddle writing, and much more. This book is truly well written in how it teaches first through theory and then through fully explained examples, breaking down calculations in clear steps. The best thing about his book is that it offers the reasoning behind different choices available to you. Once you grasp that, you have the foundational understanding to cater the theories to come up with your own personalized versions of the strategies. Only four stars for some typos that may confuse you if you're not reading carefully, like an example to buy puts instead of to sell puts and another table with some errors in sale proceeds and pretax pre-commission profits -- sloppy editing (mistakes are easily noticeable if you follow along with the calculations). My first exposure to options was through reading Saliba's Options Workbook, which is put to shame by Gross' book in terms of explaining the basics. I recommend Gross' book as a starting point for anyone interested in options. From there, move on to Fontanills' Options Course.

This is one of the better texts on conservative options strategies. It's the only book I've read that discusses the time and record keeping requirements needed to implement options strategies. This is particularly relevent to those interested in covered call writing. Some specific recommendations in the text have been made obsolete since the emergence of online ($8 commission) trading. This has greatly increased the profit potential of shorter term positions in covered call writing. In past times, longer holding periods, and rolling of options was needed to overcome the effects of high commission prices. Now, shorter holding periods, even on in the money positions, usually yields higher profitability; contrary to the advice in the book. This is still a very good text, and well worth reading.

Before reading this, or any, options book, one should go to [website] and study the subject thoroughly. Once you know the basics, this book can be appreciated. Note: unless one has at least about $5000, someone should quite probably stick to buying calls or puts (which the author, the late Mr. Gross rightfully labels as an 'aggressive' strategy), depending on the market's and a stock's overall outlook.This book is at its best when used by someone with more than $5000 (and preferably more like $10,000) who can use the time-tested hedging strategies effectively detailed here. Investors on a tighter budget would likely do better with Charles Caes'"Tools of the Bull" or "Tools of the Bear" (the "Bear" book can be easily adapted to using in a bull market also). Options investors should also know some technical analysis, John Murphy's "Charting Made Easy" is a good, cost-effective source. The layout of this book is clean and makes it easy to read. Gross was a good writer, relaying his ideas clearly to the reader. Any options book will confuse a beginner, learn them first at [website].

Most trading books give you well chosen examples of how great their methods work. Rarely the risk and downside. This one shows you the strategies, and the risks if it all goes wrong, as well as the potential profits. It walks you through clear examples and describes over a dozen strategies in a simple manner. Some I surprisingly wasn't familiar with. For example, this is one of the few option texts that mentions and walks though calendar spreads.If you can't understand this book, you shouldn't be trading options. It is one of only 4 option texts I have kept in my library. The only criticism I have is that this book was written before discount brokers, the commissions weren't updated in the examples. You should not be without this one. Larry McMillan wouldn't be involved if it wasn't first class.Another good one is Trester's "The Complete Option Player".