I picked up "rookies guide to options" after reading and enjoying Wolfinger's earlier book called "create your own hedge fund".
The rookies guide to options starts off by explaining the basics of options, how options are priced etc. After that the books goes into detailed explanations of six options strategies, all geared toward conservative investors.
Wolfinger does an excellent job of explaining the strategies in a simple way such that even a novice investor will be able to understand the strategy and how to put it into practice to grow their portfolio. I am very new to options investing and I did not have difficulty keeping up with the detailed explanations.
Each of the strategies is explained in layman's terms while still detailing the intricacies and key things to watch out for with each of the strategies. One thing I appreciated was Wolfinger's focus on conservatism and risk management which is absolutely critical for options investors.
I have recommended this book to many of my friends and this is certainly the best book on options trading that I have read. I read this book in a weekend and could hardly put it down when I first read it. Since reading the book, I have put a couple of the strategies to work in my investments and I still re-read sections of the books to guide me as I make decisions on applying these strategies.
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Most Helpful Customer Reviews on Amazon.com (beta)
239 of 242 people found the following review helpful
By far the wisest buy for earning income with options, rookie or otherwiseMay 25 2008
- Published on Amazon.com
Options are a complicated investment instrument, but if properly understood and implemented, they are far less risky than owning stock or mutual funds. And as a bonus, they are most often more profitable. Trading options, one can choose to be a risky gambler (not recommended) or a conservative income generator.
The trick is understanding options and understanding risk management. If you trade options WITHOUT understanding them, and WITHOUT any risk management implementation, then by default you are a risky gambler. You will be out of money before you know what hit you.
The option world has its own lingo. And there are myriad strategies to sift through before determining which one(s) suit your risk/reward desires. Placing the actual trade orders with your broker requires a thorough understanding and fluency of the lingo, as well as a confident understanding of the strategy you've chosen.
The good news is that this book will actually TEACH you what you need to know to be a conservative income generator with options. I can assure you it is the ONLY book that TEACHES this. I own all the major books on options that have been released in the last five years and this one is by far the best and most practical. And long overdue.
To me, in order for an author to teach options trading, he or she must provide the real world philosophy behind a strategy, real world examples, real world gotchas, real world "how", and most importantly, real world "why". Of all the books I own, this one provides the total package. The others do a good job of perhaps the philosophy and the how, but totally lack the rest. In short, no book until this one teaches the complete knowledge one requires to be successful at option trading for income.
I am a rookie in that I had not actually traded options until studying this book. I am NOT a rookie when it comes to attempting to learn how to trade options. The other books did not leave me confident in my abilities to consistently earn income with options. Thus I didn't make any trades. This book gave me the confidence to start trading AND EARNING INCOME. That point alone truly sums up the value of this book compared to all other books on the shelves. The other books are simply lacking in regard to earning income with options. They are good resources for information but not for implementation.
The author's approach is conservative. You will learn how to manage risk and see that options ARE a good, safe investment instrument if used with conservative strategies and prudent risk management techniques. You'll also learn, perhaps by constructing a spreadsheet on your own (strongly encouraged by me), just how much potential income you can earn. You'll be pleasantly surprised.
However, a strong warning here: You MUST understand and comprehend what you are reading. You can't skim this book and expect to do well. In fact, you'll fail if you skim ANY book on options. Most likely, you'll fail big time after a lucky string because you THOUGHT you understood. If you can't commit to learning, and I mean intensely learning and understanding this book, then please steer clear of options. There are no free rides. You must invest brain power to do well. Recognize that most people do not WANT to invest the brain power required. It's hard. It's intense. It's confounding. It's WORTH THE EFFORT. Eventually it clicks. Decide if you do want to commit, and if so, buy this book. It's the only one you will need to conservatively earn a steady income trading options. If you do invest the brain power, you will be proud of yourself and you'll do well financially with your new knowledge.
I want to add that the author is an experienced floor trader, and a gracious man who has replied to all questions I've asked of him via email. If you are inclined to purchase $2000+ in software and another $2000-5000+ in so called "training" or "education", please save your money and seed your options trading account with it instead. But before making ANY trades, nail down what this book teaches. It is all you need.
FYI, my own trading focuses solely on Credit Spreads (which have their own chapter in the book) and utilizing the author's philosophy on risk management. But I had to understand the ENTIRE book prior to making that decision. You would be wise to do the same before deciding your own direction.
54 of 57 people found the following review helpful
esential reading for anyone trading optionsJune 25 2008
- Published on Amazon.com
Before reading Create Your Own Hedge Fund (one of Marks other titles)I considered options to be far too risky and exotic and solely for the professional trader. However after reading the book options were no-longer anything to fear and I was completely sold on the idea of using options to both reduce risk and increase profits.
The Rookies Guide to Options takes the ideas that were previously introduced and takes them to the next level. Concepts are introduced and explained in a way that makes them easy to understand and completely transparent. You're never left wondering - but what would happen if?
It's a master class in options from a truly brilliant teacher.
I can't recommend this book enough
50 of 53 people found the following review helpful
extremely practical advice for options tradersNov. 7 2008
- Published on Amazon.com
Mark has written a terrific book that all options traders should read. He focuses on several popular strategies that you can find in many books, but the difference is that Mark gives you practical advice on how to trade, and even more importantly, how to stay out of trouble when you do trade. Mark's advice is consistently conservative. He is not so focused on milking every trade for every last dollar. It's more important to keep trades gone wrong from losing big. Over and over, you will find this important message coming through.
Mark writes in a style that is friendly, easy to read, but deceptively informative. You don't feel like you're being overwhelmed with theory, but when you look back, you find that you've actually picked up more than you thought. He demonstrates the surprising equivalence, for example, of covered call writing, which many people are comfortable doing, and selling a naked put, which sounds riskier but is in fact identical.
This book is full of really useful and practical information, and I believe anyone actively trading options would benefit from studying this book thoroughly. It's not just rookies who will gain from Mark's shared experiences. BTW, Mark maintains a web site and blog where he continues to share his knowledge. He is also most generous with his time, answering numerous questions from his readers.
25 of 25 people found the following review helpful
Not Just for RookiesJan. 28 2009
- Published on Amazon.com
I imagine my quest to successfully trade the market was fairly typical. Eventually I arrived at a fork in the road, one direction lead to washout-- the other an epiphany that not losing money was infinitely more important than pushing for gains. When I picked up Wolfinger's book I was at such an inflection point, and regretfully I'll admit it wasn't my first visit.
Mark's writing style is sensible, easy to understand, obsessively objective and thought provoking. He has a unique way of presenting obvious but frightfully neglected facts such as an admission that, he personally; does not possess the "skills" required to determine in advance where the market is going. Of course nobody does but he'll let you admit that to yourself... if you're so inclined...
It's a book for absolute neophytes up through experienced traders but the "rookie" title makes me chuckle as I find myself explaining things I've learned to peers (full-time professional traders).
Read this book (then read the chapter on equivalences- again). You may lose all desire to trade or own stock (as I have) or learn to effectively protect your investments, or you may decide that options aren't for you. Either way-- you'll gain an understanding sure to advance your probability of success in the market.
16 of 16 people found the following review helpful
The Best Investment You Wiill Make in OptionsJan. 5 2009
- Published on Amazon.com
Well, I'd like to start with this. When learning investments I have found that it pays to get your advice from people who meet the following two conditions: 1. That they are experts in their field. 2. That they have YOUR interests at heart.
These two conditions are superbly met throughout this book. The author spent decades trading options as a market maker and for his own account. He has made and lost money and in reading this book you are educated to make trades that fit your style and comfort zone, all while Mark shares real-life experiences and examples as well as the why's of specific trading strategies.
At first, I felt a leaning towards labeling this a textbook, except that would not do the book justice. While its content, examples and insights are what you would expect from a textbook it is much more than that. It is well written and I found it extremely readable. As one of the other reviewers noted, I too have found the author extremely gracious about answering what in hindsight (after reading the book), were very basic questions that I had emailed.
After trading options for the last few years with losses (even after paying some of the advisers that we all see advertised)I feel positive that if I had read this book first (it wasn't available then) I would have prevented losses and increased profits 50K or more. That's not a bad ROI! Needless to say I recommend this book.