Time To Crack Open Those (Options) Textbooks

Time To Crack Open Those (Options) Textbooks

Posted On September 7, 2022 2:53 pm

I took a quick trip to NYC for some time with my kids before they return to school. I was surprised at how many textbooks they still carry even though much of their work is done online.

While I think the best education is actual experience, getting some book learning can accelerate your success curve… If you apply what you learn.

Options trading as a skill is no different than any other skill (ok… maybe a bit elusive in terms of knowledge base and inherent value) in that it takes effort and time to become comfortable with the concepts and applications.

Start your education with a one-month trial to Options360 today!

In the spirit of back to school let’s get some book (and video) learning on.

Jargon Slashing

Option traders, like other professionals, love to use industry jargon. Talking the lingo serves several purposes:

It suggests a high level of knowledge and expertise in one’s field, accurately conveying complex concepts in a concise manner, and it just sounds cool to say things like, “I’m long, volume up the ying-yang, and bleeding theta,” which basically means one owns options that are suffering from time decay. 

Or that scalping gamma is a fancy way of saying, “I’m trying to buy low volatility and sell higher volatility as the price of the underlying stock moves back and forth within a trading range.” 

The downside of lingo is that sometimes it’s used to purposely conceal the true level of understanding, or is simply a means for the speaker to bolster his self-esteem and get the upper hand in a conversation or negotiation. 

This can be very off-putting to the layperson who is put in the position of deferring to the expert because he is reluctant to ask a “stupid question.”

With that in mind, while it’s not important to know all the jargon it is imperative to understand the concepts so as not to make a needless costly error.

Remember, members of Options360 get access to the Options Academy web call I host live every Monday.


For those who prefer video some good resources can be found here:

This information and more can easily be found at exchange are websites are from the source whence options contracts sprang; Chicago Board of Options Exchange (CBOE) page and the Options Industry Council (IOC).

For more videos, Tastytrade probably has the best archive of concise lessons for beginners through sophisticated traders.

  • Options as a Strategic Investment  by Lawrence McMillan.
  • Option Volatility and Pricing: Advanced Trading Strategies and Techniques by Shelton Natenberg.

For a deeper dive into there are plenty of good books. Two of my  of my favorites which focus on harnessing Vega and Gamma are:

  • OptionsVolatilityTrading: Strategies for Profiting from Market Swingsby Adam Warner.

And probably the best option books I’ve ever read, come Charles Cottle whom I’ve had the pleasure of sharing a panel with on several occasions.

  • Options Trading: The Hidden Reality

Which was so in depth that I had to go back and read it again. I still only understand only half of what he was saying.  

It’s not something you sit on the beach or curl up in bed to read. Summer is over, time to hit the books.

Or better yet, dive in with real time trading with the rest of the Options360 family.

Looking forward to trading with you all!


About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.