I love books. And I read a ton of them whenever I’m done chasing kids for the day or my wife and I aren’t having a date night. I stumbled upon The Rookie’s Guide to Options: The Beginner’s Handbook of Trading Equity Options by Mark Wolfinger while going Google crazy trying to find other good option trading blogs.
I stumbled upon this book as a suggestion from the Option Pit founded by Mark Sebastian. I figured what the hell, let’s add another book to the reading list (currently 36 strong) and covers the gamut from the grand strategy of the Byzantine empire to Isabel’s Car Wash, a story book on finance for kids.
I have eclectic tastes.
Let’s roll into the Rookie’s Guide to Options, hereafter known as RGTO. The edition I bought was about $25, not bad for a 383 page book counting appendices and all. This isn’t my first book on options. The other one was more about commodities, and well…corn just doesn’t get my blood moving.
RGTO is broken down into three parts. Part one focuses on giving the reader the basics on stock option trading. Part two covers basic trading strategies, and part three moves on to more advanced strategies. Twenty-two chapters in all, most in the 15-20 page range which is great for bite sized reading.
Allow myself to introduce myself…the introduction
Without fail I will read the introduction of every book. It makes me feel like I’m sitting down with the author prior to launching into a class or a lecture with them for the rest of the book. It’s more personal and I think more of the author’s personality resides in the intro than in other sections.
Wolfinger doesn’t jump right into explaining options, but more his overarching philosophy for the book. Risk management is going to be a central theme of the book. Not only because it’s the entirety of chapter 7, but it’s integral to trading successfully and is the core of Wolfinger’s way of trading.
The best part about the introduction…no words I have to look up on Investopedia. This idea of simplicity and making options easy to understand is another key point. One I think will be executed nicely.
Grade school all over again…pop quizzes
Wolfinger doesn’t just let you off easy at the end of each chapter either. Nope, there’s quizzes which I think is AWESOME!!! Any chance you get to DO what you just LEARNED helps reinforce it in your brain and will make you a more confident trader.
I think this is a great way to train people. Many online courses or other books just shoot you with a fire hose of information and expect you to retain it all. That’s not a good way to learn and you’ll probably only remember the beginning and the end.
Seriously, you don’t know how excited I am to attack the first quiz…yes, I’m a dork.
What does option trading do for me?
This is a question I know I asked when I first began learning about options trading. At first I thought it was something only math whizzes and millionaires had access to. Wrong.
Wolfinger highlights the benefits of trading options to the average investor, reducing risk and losing less money when you lose. Two results I think many investors would be happy to see in their investment activity.
I just mentioned why I didn’t think I options trading was accessible to me. Did you have similar thoughts when you first learned about it?
This “forbidden fruit” idea plus a few others is part of Wolfinger’s explanation for why more people don’t use options. Options can be for everyone if we just take the time to learn the basics and implement strategies smartly.
The first rule of trading is…
Don’t lose it all.
Pretty simple huh?
Makes sense to me since it’s hard to trade with a gigantic goose egg in your account. Mark highlights additional rules which revolve around his central theme of risk management, but I think it all boils down to rule numero uno.
You all know I don’t have a large account size to meet my goal with, so you can rest assured I’ll be sticking to this rule hard and fast.
Let’s do this!!!
That about sums up the intro! Quick and easy! I’m excited to blast into this book and see what I can learn. I know I don’t have a good handle on many of the basic concepts of option trading, despite having taken a $500 course on the topic. I think this book will solidify my foundation in options and move my account toward my goal!
Grab a copy of The Rookie’s Guide to Options and follow along with me as we educate ourselves on the amazing world of options!