By Mark Wolfinger
$34.95, 232 pages
With more than 30 years experience in the equity options market, Mark Wolfinger isn’t afraid to make a trade. He doesn’t want you to be either. In his introductory book to equity options trading, Wolfinger thoroughly examines options, their potential as an investment instrument and outlines six strategies in great detail. By the end, he accomplishes his goal of providing you with viable tools, while simultaneously cautioning against common pitfalls.
The book is written primarily for equity traders wishing to expand their investment horizons. However, Wolfinger also makes the book useful for those with little to no investing experience.
Earlier chapters spend a great deal of time explaining options and the inner workings of the options industry. Wolfinger’s philosophy is two pronged: too often investors shy away from options due to ignorance, and that same lack of understanding can lead rookies into dangerous areas. He wants to make sure you have a firm grasp, occasionally belaboring the point. If you already know options, these chapters can be skimmed or ignored entirely, but to the true novice they are invaluable.
Later chapters dig into specific strategies. In keeping with the overall structure, the first and simplest strategy, covered call writing, takes the longest to detail. Every strategy is accompanied by numerous examples and fictitious trades. These are very helpful and comprise a large portion of the book.
Throughout the text, Wolfinger stresses that these are his opinions based on his personal conservative style of trading. He emphasizes that it is the reader’s decision what to do with his or her money. When explaining unfavorable positions, he notes, “If you find yourself in that unfortunate situation (and you will), it’s important to decide when to adjust the position. Closing your eyes and hoping for the best is not a winning strategy.”
The book provides a hefty portion of knowledge and know-how in an easy read and reference text. For the options beginner, it is ideal. The book’s re-usability is by far its strongest point. Wolfinger doesn’t expect you to be an expert before you place your first trade, so he writes with the expectation that you will review as you gain real experience. Even without the bonus disc, which includes an options calendar, European-style option calculator and bonus quiz, the book is definitely worth the price.
Tom Nunlist is a student at the Medill School of Journalism currently studying in Nanjing, China. Reach him at email@example.com.