A question for Option Traders

jjf · Mar 25, 2009

I know very little about Options Trading (my background is Fx and Futures)

What is the best way of learning about the Options business.
What would you recommend please

thanks
jjf

nazzdack · Mar 25, 2009

Quote from jjf:
....the best way of learning......

For the mega-umpteenth time: McMillan, then Natenberg, then Cottle.

dagnyt · Mar 25, 2009

Quote from jjf:

I know very little about Options Trading (my background is Fx and Futures)

What is the best way of learning about the Options business.
What would you recommend please

thanks
jjf

Begin with reading some basic material.

Look at this: [LINK corrected]
http://blog.mdwoptions.com/options_for_rookies/2009/03/can-you-make-mney-with-options.html

Then go to
http://www.cboe.com/LearnCenter/default.aspx

and

http://www.optionseducation.org/

I strongly recommend my very easy to understand, detailed guide for rookies:

The Rookie's Guide to Options.

Mark

dagnyt · Mar 25, 2009

Quote from nazzdack:

For the mega-umpteenth time: McMillan, then Natenberg, then Cottle.

I've brought up this discussion before, but I must ask you:

Have you looked at Natenberg and Cottle recently?

How in he world is someone who doesn't understand how options work or who has zero experience using them going to understand a word of what Natenberg teaches. Sure, it's a great book - but it's not for the inexperienced trader.

As for Cottle, he's a one-idea man. Synthetics. I agree that synthetics (equivalent positions) are important, but what's the point o learning how to box or butterfly a position when the reader doesn't even understand the original trade or why it was initiated.

C'mon Nazz, good books for the advanced trader are not necessarily books for beginners.

Mark

jmbean · Mar 25, 2009

If i wanted to trade SPX, what are the ways to trade this index? Just options? Spreads seem so large. Thanks

dagnyt · Mar 25, 2009

Quote from jmbean:

If i wanted to trade SPX, what are the ways to trade this index? Just options? Spreads seem so large. Thanks

Spreads are HUGE, but you can always trade at better prices. Do not pay offers. Do not sell bids. You can do better.

Mark

Trader666 · Mar 25, 2009

Go with McMillan. Don't even think about Natenberg yet. And on the CBOE site, download Options Toolbox for free here so you can get a hands-on feel for how options work.
http://www.cboe.com/LearnCenter/Software.aspx

spindr0 · Mar 25, 2009

Quote from jjf:

I know very little about Options Trading (my background is Fx and Futures). What is the best way of learning about the Options business.

Read everything that you can get your hands on (web sites, the library). Don't worry if you don't understand all of it. Once you have a basic foundation, you'll get a feel for what is and what's not for you and you'll be able to judge what books will have something to offer you.

opt789 · Mar 25, 2009

Quote from jmbean:

If i wanted to trade SPX, what are the ways to trade this index? Just options? Spreads seem so large. Thanks

Trade ES options instead. Reasonable bid/ask spread and you can directly hedge with the ES futures. Lower margins also if that matters to you. If you donât want to do futures then SPY would be what you want to use.

erol · Mar 25, 2009

as someone who is learning myself,

I really really enjoyed

Options made Easy by Guy Cohen

Are you going to learn all of this from one book? No

But I've learned a lot from it.

CBOE also has their courses for free (sponsored by optionxpress)