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

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

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 , 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”.

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
```