Understanding Options

I recently purchased two books on options trading. I'm a beginner so I needed something that clearly explained how options trading works. Understanding Options by Michael Sincere is an excellent book for a beginner. The other book that I purchased is Options Made Easy (2nd edition) by Guy Cohen. If you're a beginner, Option Made Easy isn't so easy. I wouldn't recommend this for a beginner. Stick with Michael Sincere in Understanding Options. It's a worthwhile investment!

I am your typical small investor, in love with penny stocks and ETFs. A friend got me curious with options trading and saw how he was making returns, however he wasn't just going to stand over my shoulder all day and tell me what to do, so I had to learn. Among the many books I have bought and read was this one. "Understanding Options" isn't written in legal jargon and confusing terms; it is written in very laymen terms that most anyone can follow and comprehend. Especially in today's economic climate, you need guidance as to how to play the market. Those seminars by the airport just take your money and confuse you even more just to sell you expensive software when you still never understand the fundamentals. Knowledge and information are critical in any sort of investing; if you plan to trade options on any level, you'll be glad you read this book.

I have been a stock market investor for 25 years. Over that time I think I probably learned, in bits and pieces, everything in this book. The problem is I didn't have a complete picture of what options were all about or how many of the elements of options trading (i.e. delta, spread, volatility, etc.) related and affected the potential of any given option or strategy. Therefore, I never bought or sold a single option. Had I read this book years ago my overall investing performance would have been greatly improved and the number of sleepless nights greatly reduced. This book is an extremely easy read for anyone with a general idea of what options are about and I suspect would not pose an overwhelming challenge even for someone with no knowledge at all on the subject. The most exciting outcome of my reading this book is I placed my first options trades today. A few of my trades today were for hedging purposes on my existing portfolio and a few were for speculation. I doubt I will ever become a "day trader" or an options guru, but I now can stay active in my portfolio, blending modest hedges and speculation for what almost certainly will be a better overall outcome. Thank you Mr. Sincere.

Michael Sincere did a fine job writing this book so that anyone who has no experience with options is able to comprehend the topic with ease, even those who are not good at mathematics and numbers. He briefly explains calls, puts, how to buy, how to sell options, and he even discusses advanced options strategies such as spreads and straddles.

Reading a book on Options Trading is usually a daunting task. While it is true that statistical probabilities, The Greeks and mathematically determining an overpriced or underpriced option all play a part in option trading, in the beginning, this often confuses and intimidates a novice. Michael Sinceres' book is different. He leaves the mathematics alone. In very simple language, Sincere walks you through the four basic option trades: 1. The Covered Call. 2. Buying a Call. 3. Buying a Put. 4. Selling a Put. What you may not know is that most brokerages will limit a beginning option traders to these 4 trades anyway. As if he were sitting at your kitchen table, Sincere actually takes you step- by-step, through each trade. No, this is not a complete treatise on option trading but it is a very good start. It is true that the key to option success is choosing the right underlying stock. If you have never bought a stock, his book on stock trading would be a better choice. It is also true that options are a form of gambling and anyone who says their "system" guarantees success is probably selling something very expensive. If you have experienced trading stocks and are looking for your first option book, this would be the one I'd recommend.