The Smart Profits Report: Issue #156
Wednesday, November 03, 2004 Options Trading Books: The Only Realistic Options Book at Barnes & Noble
By Mt. Vernon Research Team They joke in my family, "Please don't give her a book on brain surgery!" I'm a reader and a firm believer that if anyone is skillful at something they can pass it on... and if they can write, they can pass it on in a book... I learned to knit, to do some light auto body work, cook, assemble a wedding cake, cut a perfect miter and build a Parson's table, fix a leaky faucet, replace a floor, hypnotize myself, meditate, read Spanish, arrange flowers... you name it... from books. I even learned a lot about investing from books too. But I didn't learn much of anything about options from any of the options trading books I've ever read. Of all the endeavors humans assay, options must be unique in having so many worthless books and so few passable ones. Even when you find a few good pages here and there, bad pages usually surround them. When anyone asks me what book to read to learn about options I say, "Please don't." The One Options Book I Recommend Without Caveat But there is one book I would recommend to every options trader, whether you are a beginner or an old hand. It is High Probability Trading by Marcel Link (see the Cribsheet for more info). Get it. Read it. Link is an experienced trader and he's had a lot of contact with beginning option traders - including people who have decided to quit their day jobs to become instant millionaires "the easy way, with options." He answers the strategic questions that new traders either ask or should ask. This options trading book is solid from start to finish, but you don't have to use the whole book - the meat in the first half of the book will put you light years ahead of most traders. A Dose of Reality Improves Your Odds What's the most valuable reason to own this options trading book? Link's realism. The one thing a new trader does not know until he experiences it and learns the hard way is what to expect when trading options. Because he doesn't know what to expect, the typical new trader doesn't have the right goals and - more important - he doesn't have a strategy for getting out of trouble, let alone knowing when to cash in. Link will help you know what to do when you start trading options for real. For example: What do you do when... - Your option is up 40%... Do you hang on for more or take the money and run?
- You lost on three trades in a row... Do you change your whole system or is that normal?
- The stock made a big move in the wrong direction... Was that a warning to bail out or was it just a normal blip?
This Book Will Give You Something Essential: A System Even after years of trading I can tell you that the options market presents many such dilemmas every single day. Along with questions like those above, I often hear ones like: Can you really make $10,000 a month? How much should you put on one trade? Yes, Link's book will help you answer some of these "newbie" questions - and it's only natural that people should want these questions answered. But in the end, it gives you something more than that: It gives you the tools to build your own options system. As Karim has said many times: To win at options, you must create a high probability for success. And the only way to do that is with a system. Good Investing, Mt. Vernon Research Team Today's Smart Profits Cribsheet - If you can't find High Probability Trading by Marcel Link in your bookstore, you can order it online at Amazon. Quality books on options (which you don't want to read anyway, since they are mostly formulas and jargon) cost $70 and up.
- Today we talked a little about the importance of having a system when you trade options. If you'd rather use a proven system developed by a master options trader with a success rate of 70%-plus, check out Karim Rahemtulla's Income Trader: A Covered Call System, or his LEAPS Option Trader.
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