Best learning book

Which is the best option learning book in india ?
I have gone through zerodha varsity but not getting it…I need explaination with example of various strategies.

You can check LearnApp. It’s not a book, the platform has excellent video content relating to FNO. They provide video lessons on investing & trading. Each course is taught by experts and well-known leaders from the industry.

He asked about ‘books’. Learn app does not have any books.

You can check out the book designed by NSE itself, they have done a good job. IDK if hard copy is available.
Also there are other option trading related books but the authors are not Indians so these might not be very concentrated on our markets. However basics do remain the same.

you really are present everywhere,

Temporarily

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are you active on Crypto?
i try to seek opportunity in equity & crypto
No naked derivatives only for hedges
: ( sadly can’t trade forex but have plans saved for it too

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you rather seems to be cool & young, everyone feels like my neighbourhood
pops

I’m not trading in crypto but I’m aware of the things that’s happening in crypto world. I’m into learning about the block chain tech and such stuff. But may be in future when everything seems to be clear then I might try it. But I don’t think it will happen in the near future.

hehe :grinning_face_with_smiling_eyes:, thanks. @Lalit_Kishor

Yea, I do feel the same here.

In my view, before trading options, one needs to understand what it exactly is. For that, one will need to understand stochastic caculus and the Blacks Scholes model. By the end of this one should be able to understand what an option is used for by large-sized market participants and in which manner. This should ideally help one position themselves accordingly. Options strategies is probably the last thing one needs to know and if one already knows stochastics and black scholes then strategies can automatically be derived.

A reference book as a starting point for this could be the “Stochastic Calculus for Finance I & II”.

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The best book for someone new to options, IMO is “Options as a strategic investment - Lawrence G. McMillan”. It’s a huge book (1000+ pages), the TOC (for your evaluation whether to buy or not) is:

[EDIT] I just posted here, a site where you could download this book (and many others) for free.

Part I - Basic Properties of Stock Options

Chapter 1 - Definitions
Elementary Definitions
Factors Influencing the Price of an Option
Exercise and Assignment: The Mechanics
The Options Markets
Option Symbology
Details of Option Trading
Order Entry
Profits and Profit Graphs

Part II - Call Option Strategies

Chapter 2 - Covered Call Writing
The Importance of Covered Call Writing
Covered Writing Philosophy
The Total Return Concept of Covered Writing
Computing Return on Investment
Execution of the Covered Write Order
Selecting a Covered Writing Position
Writing Against Stock Already Owned
Diversifying Return and Protection in a Covered Write
Follow-Up Action
Special Writing Situations
Covered Call Writing Summary

Chapter 3 - Call Buying
Why Buy?
Risk and Reward for the Call Buyer
Which Option to Buy?
Advanced Selection Criteria
Follow Up Action
A Further Comment on Spreads

Chapter 4 - Other Call Buying Strategies
The Protected Short Sale (or Synthetic Put)
Follow Up Actions
The Reverse Hedge (Simulated Straddle)
Follow-Up Action
Altering the Ratio of Long Calls to Short Stock
Summary

Chapter 5 - Naked Call Writing
The Uncovered (Naked) Call Option
Investment Required
The Philosophy of Selling Naked Options
Risk and Reward
Summary

Chapter 6 - Ratio Call Writing
The Ratio Write
Investment Required
Selection Criteria
The Variable Ratio Write
Follow-Up Action
An Introduction to Call Spread Strategies

Chapter 7 - Bull Spreads
Degrees of Aggressiveness
Ranking Bull Spreads
Follow-Up Action
Other Uses of Bull Spreads
Summary

Chapter 8 - Bear Spreads Using Call Options
The Bear Spread
Selecting a Bear Spread
Follow-Up Action
Summary

Chapter 9 - Calendar Spreads
The Neutral Calendar Spread
Follow-Up Action
The Bullish Calendar Spread
Follow-Up Action
Using All Three Expiration Series
Summary

Chapter 10 - The Butterfly Spread
Selecting the Spread
Follow-Up Action
Summary

Chapter 11 - Ratio Call Spreads
Differing Philosophies
Follow-Up Action
Summary

Chapter 12 - Combining Calendar and Ratio Spreads
Ratio Calendar Spread
Choosing the Spread
Follow-Up Action
Delta-Neutral Calendar Spreads
Follow-Up Action

Chapter 13 - Reverse Spreads
Reverse Calendar Spreads
Reverse Ratio Spread (Backspread)

Chapter 14 - Diagonalizing a Spread
The Diagonal Bull Spread
Owning a Call for “Free”
Diagonal Backspreads
Call Option Summary

Part III - Put Option Strategies

Chapter 15 - Put Option Basics
Put Strategies
Pricing Put Options
The Effect of Dividends on Put Option Premiums
Exercise and Assignment
Conversion

Chapter 16 - Put Option Buying
Put Buying versus Short Sale
Selecting Which Put to Buy
Ranking Prospective Put Purchases
Follow-Up Action
Loss-Limiting Action
Equivalent Positions

Chapter 17 - Put Buying in Conjunction with Common Stock Ownership
Which Put to Buy
Tax Considerations
Put Buyins As Protection for the Covered Call Writer
No-Cost Collars

Chapter 18 - Buying Puts in Conjunction with Call Purchases
Straddle Buying
Selecting a Straddle Buy
Follow-Up Action
Buying a Strangle

Chapter 19 - The Sale of a Put
The Uncovered Put Sale
Follow-Up Action
Evaluating a Naked Put Write
Buying Stock below Its Market Price
The Covered Put Sale
Ratio Put Writing

Chapter 20 - The Sale of a Straddle
The Covered Straddle Write
The Uncovered Straddle Write
Selecting a Straddle Write
Follow-Up Action
Equivalent Stock Position Follow-Up
Starting Out with the Protection in Place
Strangle (Combination) Writing
Further Comments on Uncovered Straddle and Strangle Writing

Chapter 21 - Synthetic Stock Positions Created by Puts and Calls
Synthetic Long Stock
Synthetic Short Sale
Splitting the Strikes
Summary

Chapter 22 - Basic Put Spreads
Bear Spread
Bull Spread
Calendar Spread

Chapter 23 - Spreads Combining Calls & Puts
The Butterfly Spread
Combining an Option Purchase and a Spread
A Simple Follow-Up Action for Bull or Bear Spreads
Three Useful but Complex Strategies
Selecting the Spreads
Summary

Chapter 24 - Ratio Spreads Using Puts
The Ratio Put Spread
Using Deltas
The Ratio Put Calendar Spread
A Logical Extension (The Ratio Calendar Combination)
Put Option Summary

Chapter 25 - LEAPS
The Basics
Pricing LEAPS
Comparing LEAPS and Short-Term Options
LEAPS Strategies
Speculative Option Buying with LEAPS
Selling LEAPS
Spreads Using LEAPS
Summary

Part IV - Additional Considerations

Chapter 26 - Buying Options and Treasury Bills
How the Treasury Bill/Option Strategy Operates
Summary

Chapter 27 - Arbitrage
Basic Put and Call Arbitrage (“Discounting”)
Dividend Arbitrage
Conversions and Reversals
More on Carrying Costs
Back to Conversions and Reversals
Risks in Conversions and Reversals
Summary of Conversion Arbitrage
The “Interest Play”
The Box Spread
Variations on Equivalence Arbitrage
The Effects of Arbitrage
Risk Arbitrage Using Options
Pairs Trading
Facilitation (Block Positioning)

Chapter 28 - Mathematical Applications
The Black-Scholes Model
Expected Return
Applying the Calculations to Strategy Decisions
Facilitation or Institutional Block Positions
Aiding in Follow-Up Action
Implementation
Summary

Part V - Index Options and Futures

Chapter 29 - Introduction to Index Option Products and Futures
Indices
Cash-Based Options
Futures
Options on Index Futures
Standard Options Strategies Using Index Options
Put-Call Ratio
Summary

Chapter 30 - Stock Index Hedging Strategies
Market Baskets
Program Trading
Index Arbitrage
Follow-Up Strategies
Market Basket Risk
Impact on the Stock Market
Simulating an Index
Trading the Tracking Error
Summary

Chapter 31 - Index Spreading
Inter-Index Spreading
Summary

Chapter 32 - Structured Products
Part I: “Riskless” Ownership of A Stock or Index
The “Structure” of a Structured Product
Cash Value
The Cost of the Imbedded Call Option
Price Behavior Prior to Maturity
SIS
Computing the Value of the Imbedded Call When the Underlying Is Trading at a Discount
The Adjustment Factor
Other Constructs
Option Strategies Involving Structured Products
Lists of Structured Products
Part II: Pructs Designed to Provide “Income”
PERCS
Call Feature
A PERCS Is a Covered Call Write
Price Behavior
PERCS Strategies
PERCS Summary
Other Structured Products
Structure Product Summary

Chapter 33 - Mathematical Considerations for Index Products
Arbitrage
Mathematical Applications

Chapter 34 - Futures and Futures Options
Futures Contracts
Options on Futures
Futures Option Trading Strategies
Commonplace Mispricing Strategies
Summary

Chapter 35 - Futures Option Strategies for Futures Spreads
Futures Spreads
Using Futures Options in Futures Spreads
Summary

Part VI - Measuring and Trading Volatility

Chapter 36 - The Basics of Volatility Trading
Definitions of Volatility
Another Approach: GARCH
Moving Averages
Implied Volatility
The Volatility of Volatility
Volatility Trading
Why Does Volatility Reach Extremes?
Summary

Chapter 37 - How Volatility Affect Popular Strategies
Vega
Implied Volatility and Delta
Effects on Neutrality
Position Vega
Outright Option Purchases and Sales
Time Value Premium is a Misnomer
Volatility and the Put Option
Straddle or Strangle Buying and Selling
Call Bull Spreads
Vertical Put Spreads
Put Bear Spreads
Calendar Spreads
Ratio Spreads and Backspreads
Summary

Chapter 38 - Distribution of Stock Prices
Misconceptions about Volatility
Volatility Buyer’s Rule!
The Distribution of Stock Prices
What This Means for Option Traders
Stock Price Distribution Summary
The Pricing of Options
The Probability of Stock Price Movement
Expected Return
Summary

Chapter 39 - Volatility Trading Techniques
Two Ways Volatility Predictions Can Be Wrong
Trading the Volatility Prediction
Trading the Volatility Skew
Volatility Trading Summary

Chapter 40 - Advanced Concepts
Historical and Implied Volatility
The “Greeks”
Strategy Considerations: Using the “Greeks”
Advanced Mathematical Concepts
Summary

Chapter 41 - Volatility Derivatives
Neutrality
Calculation of VIX
Listed Volatility Futures
Other Listed Volatility Products
Listed VIX Options
Trading Strategies: Directional Signals
Using VIX Futures Information
Using and Trading the Term Structure
Protecting a Stock Portfolio With Volatility Derivatives
Other Macro Strategies
Hedged Strategies Using Volatility Derivatives
Ratio Spreads With VIX Options
Volatility Derivatives Summary

Chapter 42 - Taxes
History
Basic Tax Treatment
Exercise and Assignment
Special Tax Problems
Summary
Tax Planning Strategies for Equity Options
Summary

Chapter 43 - The Best Strategy?
General Concepts: Market Attitude and Equivalent Positions
What Is Best for Me Might Not Be Best For you
Mathematical Ranking
Summary
Postcript

Part VII - Appendices

Appendix A - Strategy Summary
Appendix B - Equivalent Positions
Appendix C - Formulae
Appendix D - Graphs
Appendix E - Qualified Covered Calls
Appendix F- Portfolio Margin
Glossary
Index
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