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The Smart Profits Report: Issue #236
Wednesday, August 24, 2005
Stock Options Books: How to Get the World’s Best Options Book - Free
By Karim Rahemtulla
Investment Director, Mt. Vernon Research
Homer’s Iliad, Tolkien’s Silmarillion, Kipling’s Jungle Book, Herbert’s Dune, the Options Clearing Corp.’s Characteristics and Risks of Standard Options… Which one would you rather sit in your comfy chair and read on a rainy Sunday afternoon? If you picked the last one, I have to congratulate you for being a dedicated investor. You will do well in life and your children will be prosperous, and… well, get a life!
I’ve read hundreds of stock options books, wasted thousands of dollars looking for something I could give to a beginning options trader with a clear conscience. Even the best ones skip over key insights as they focus either on explaining the mechanics of trading or obscure points of questionable systems.
What they all lack are the ground-level practicalities that investors new to options need to know. For instance, none of these books explains how or why to use limit orders, yet that’s a key tool every professional trader knows. Nor do any of them talk about the role of the market maker in any helpful depth, as we have in this space.
That said, of all the books, pamphlets and other material I’ve read about options, the "Characteristics and Risks of Standard Options" is actually at or near the top of the list. And I’ll tell you in a second exactly how to get your own copy free of charge.
Before I give details, let me first address the issue of options books in general. Specifically, why do they tend to be so damned boring?
If Books Could Kill, They’d Probably Be About Options
Yep, "Characteristics" is the best… But it, too, is also a tad boring - even to someone who enjoys options. Not that the other books and pamphlets about options are any prizes, including the many attempts to jazz up the subject and make it easy to read.
Serious books on investing in general are about as exciting as shaving corns from your big toe. Options books are worse. Not only ugly, but downright painful, as well.
They are written, for the most part, by academics who frown on excitement. After the first few pages, you find yourself scouring the trash can looking for the receipt so you can get your money back. If publishers of these books were smart, they would make sure that there was no money-back guarantee.
Rockets Are Exciting, But Who Wants to Read a Physics Textbook?
It’s not the subject matter’s fault - well, not entirely.
Options are a very exciting investment tool, but you really do have to be a techno nerd to grasp each and every nuance and formula involved in understanding the value, trading and performance characteristics of options. The theory of options is abstract and math-driven. No fun to read at all.
So, instead you have me.
I do the dirty work for you, the boring reading, plugging in numbers to get hypothetical outcomes, trudging through the highly entertaining and humorous writing style of someone who probably still has his first grade homework in a plastic sleeve, and then I will try to relate what he/she is saying to you, but in English.
In the meantime take my advice and get the free guide by contacting one of the options exchanges. Or you can just contact the Options Clearing Corporation directly (contact information is in today’s Crib Sheet, below).
It’s a valuable little book - and you can’t beat the price.
Good trading,
Karim Rahemtulla
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Today’s Smart Profits Cribsheet
- To get your copy of Characteristics and Risks of Standard Options, just call 888.OPTIONS, or write to the Options Clearing Corporation, One North Wacker Dr., Suite 500, Chicago, IL 60606.
- To learn more about any options terminology used in today’s report, just check out the Smart Profits Glossary.
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- Options Books for Serious Traders
- Options Trading Books: The Only Realistic Options Book at Barnes & Noble
- The Smart Profits Report Recommended Option Books Listing
