The 3 Best Options Trading Books You Never Heard Of​

  • September 4, 2024
  • Larry Connors
The 3 Best Options Trading Books You Never Heard Of​

Larry Connors' Trading Lesson of The Day | September 4, 2024

As someone who has written a number of books on trading, including two award-winning books, I always appreciate learning from other professionals in the industry.


Too many options books cover the basics over and over again. There is no shortage of books that teach “this is a bull call spread” etc. This is especially true with option trading books; those written from professionals whose insight and the sharing of intermediate-level to professional-level options trading that can be applied immediately.
 
These books are necessary though. Most are meant to make sure you have the important foundation in place before moving ahead.
 
A few rare ones, though, teach you real-world strategies that you can apply based on real-world market scenarios. Some even include back-tested results along with academic studies to support their strategies.
 
The following three are my favorite because they’re written by real-world professionals who are kind enough to share their knowledge with us.


None of them wrote these books to make money. 


It’s a well-known fact, there’s no real money in writing trading and investing books. The real wealth that writing books brings is the knowledge that so many people are positively impacted by the book you wrote.


The following three options trading books are not written by household names. Nor do they show up on many lists.


What they do though is teach. In fact, I continuously go back to each from time to time and nearly always come up with new knowledge that I can apply to my own trading.


This is saying a lot because I’ve been trading options since 1982. I’ve also had the good fortune of learning options trading from a number of the legends like, Tony Saliba and Shelly Natenberg among that group.


Here are the three best options trading books you’ve likely never heard of. They’re in no particular order. Go to Amazon, read their description, and decide which, if not all, fit your options trading.

1. Positional Options Trading - Euan Sinclair

Euan is the best kept secret out there. 
 
His background speaks for itself. He has a PhD in theoretical physics from the University of Bristol and has applied his knowledge to the derivatives markets having traded professionally for both banks and hedge funds.

The things I like the best about this book, (and there are many) include:
 

▶︎ It’s easy to read if you have intermediate level options knowledge. Too many books written by PhDs are not easy to read. This one is.

▶︎ Euan has real strategies in it. 

I often go back into this book, randomly choose a chapter, and by the time I’m done reading it, I find myself building or expanding upon strategies based on what he’s taught.  

▶︎ He accomplishes this with minimal math knowledge required. No need to brush up on your calculus to apply his knowledge to your options trading.

Also, Euan’s books on Volatility Trading, primarily written for professionals, are also excellent. 

If you’re an options trader, and want to learn real-world strategies and concepts, this book is a must own.

2. The Second Leg Down - Hari Krishnan

This book is a gift. Amazon recommended it to me a few years ago. I sampled it, then purchased it, and have since created multiple strategies because of it. It’s beyond an options book which makes it even more special.

I’ll let Hari give you his background and his market philosophy – this is directly from Amazon… 

“I am an expert in global macro, volatility and systematic trading. Writing consolidates what I do know and reduces work-related existential angst.

My goal is to solve important investment problems in a concrete yet relatively sophisticated way. While I admire the technical experts, the last thing I want to do is write the zillionth book on option pricing or cover material that everyone already has access to.

Originality is very important to me, but obfuscation is NOT. I have tried to be as clear and direct as possible in the various papers I have written as well as in The Second Leg Down.

I try to mix anecdotal evidence, statistical analysis and mathematical models in a way that gives the reader a relatively complete picture of the way the industry works (or perhaps should work).

I also strive to keep the reader entertained while providing as much digestible content as I can.”

This perfectly describes The Second Leg Down. It’s beyond an options book because a number of his strategies and concepts include futures, and also equity markets examples. 

Like Euan’s book, you can’t go too far without learning real world concepts and insights which you can then trade.

Again, this book is not for beginners. It’s for you if you are an experienced trader and want to learn new concepts, or be reminded of repeatable market behavior which is supported by data and also numerous academic studies.

3. Options Expiration - Jeff Augen (this is especially for 0DTE traders)

Jeff wrote this book over 15 years ago when there was no such thing as 0DTE options. In fact I’m not sure if there were even many expirations options back then.

What Jeff did was write the first, and still possibly the only, book written by a professional who examined the behavior of options on expiration day. The behavior he quantified back then is still the behavior that exists today.

The only caveat is that the examples used are from the Great Financial Crisis date range, so you’ll see elevated volatility readings that haven’t really been seen since publication. The concepts though, and many of the pricing inefficiencies that occur now daily in 0DTE options can be found here in this book. 

Also, Jeff is the real deal. A long-time friend of mine, who is a former floor trader and has been a successful market maker in one of the global markets for decades, attended a course Jeff taught in New York City a handful of years ago. He said Jeff’s course was hands down the best options course he has ever taken.

Augen has other books that are also very good but with 0DTE options now making up more than half the options volume in the US, and with still so little credible published information on how to trade expiration days, this book is an excellent one to learn from.

There you have it. Three books written by three professionals who were kind enough to take their immense knowledge and share it with the world.

I hope you enjoy these books. There are many great options books out there, but these three are the best-kept secrets (until now).

If you have any comments or questions on today’s Trading Lesson, please feel free to send them to me at lconnors@cg3.com.

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