Best futures trading books according to redditors
We found 71 Reddit comments discussing the best futures trading books. We ranked the 12 resulting products by number of redditors who mentioned them. Here are the top 20.
We found 71 Reddit comments discussing the best futures trading books. We ranked the 12 resulting products by number of redditors who mentioned them. Here are the top 20.
First of all, thanks for sharing. Code & idea implementation sucks, but it might turn into a very interesting discussion! By admitting that your trade idea is far from being unique and brilliant, you make a super important step in learning. This forum needs more posts like that, and I encourage people to provide feedback!
Idea itself is decent, but your code does not implement it:
Just because 0 looks good, you decide that 0 is the best threshold. You have to do a research here. You'd be surprised by how counter intuitive the result might be, or how super unstable it might be=))
The lesson is: idea first. Define it well. Then try to pick minimal number of indicators (or functions) that implement it. Check for parameter space. If you have too many parameters, discard your idea, since you will not be able to tell if it is making/losing money because it has an edge or just purely by chance!
What is left out of this discussion: cross validation and picking best parameters going forward
Recommended reading:
I'd recommenced doing some reading:
https://www.investopedia.com/university/options/option.asp
https://www.amazon.com/Understanding-Options-2E-Michael-Sincere/dp/0071817840
I'm a professional equities/options trader at a large trading house. Everyone in the industry has read the book below. Read that and also investopedia is a great start. Follow IG for trading tips and BE VERY CAREFUL. When you first start, only BUY calls/puts. You don't want to sell contracts when you start...unlimited downside
Link: Options, Futures, and Other Derivatives https://www.amazon.com/dp/0132164949/ref=cm_sw_r_cp_api_nEbUAb081KA5S
IG: https://instagram.com/p/Bgvz3VDFmdp/
i learned a lot from these two books:
https://www.amazon.com/gp/product/B00GWSXX8U (how options work)
https://www.amazon.com/gp/product/B007STBH58 (how not to be a retard)
if you're doing options you have to understand how they're priced (intrinsic vs extrinsic value, time decay, implied volatility, etc).
other than that, just practice and feel the pain of losing money. find out what works. first time i did options, i lost 3k and wanted to kill myself.
Probably start with something like:
And then you decide whether you are going to focus on one of the two primary trading strategies (mean reversion or momentum) and focus on that one for a bit.
And that's assuming you have the programming knowledge to implement a system that can handle this of course - otherwise I'd go start with C# or C++ until further notice.
Early on, I was in nasty drawdown period and I was having trouble figuring out what was off. I made the same mistake virtually all traders make, I caved to the vast collection of trading psychology books. When the guy mentoring me found out what I was reading, he gave me the following gem: Only pikers worry about psychology, either you have an edge and you exploit it, or you don't have one and you lose and chase every other excuse.
Trading and Exchanges
Options, Futures & Other Derivatives
Option Volatility & Pricing
Volatility Trading
Dynamic Hedging
99% of finance books are garbage, but those are the ones I thought helped me in some way or another. There's also plenty of interesting research papers if you've got access to some databases.
https://www.amazon.com/Rookies-Guide-Options-Beginners-Handbook/dp/193435404X
This goes over all of the basic trades. How to enter and exit. And how to make adjustments. It’s a little long winded but very informative.
https://www.amazon.com/Understanding-Options-2E-Michael-Sincere/dp/0071817840
This is less wordy and covers the same topics. However it is less informative than the rookie book. Probably good to start here and then read the rookie book.
Just ordered Understanding Options yesterday. Was recommended for a primer on Options.
https://www.amazon.com/Understanding-Options-2E-Business-Books/dp/0071817840/ref=sr_1_1?ie=UTF8&qid=1491571017&sr=8-1&keywords=options
http://www.amazon.com/gp/product/0071817840?psc=1&redirect=true&ref_=oh_aui_detailpage_o04_s00
And then PM me questions. If you have the risk tolerance and the capital to be doing what you're doing with TSLA and the mind to graduate with the degree you're getting you could be making a literal fortune. No joke.
Two excellent titles on the subject are Option Volatility and Pricing: Advanced Trading Strategies and Techniques, 2nd Edition by Natenberg and Options, Futures, and Other Derivatives (10th Edition) by Hull.
The former is lighter, more entertaining read that is easier on math and touches on applied trading. The latter is a more thorough, academic title.
A number of other helpful resources are available. The Ally Invest Options Playbook provides a handy reference for various option strategies. The Interactive Brokers Probability Lab (free version linked at the bottom of the page) provides a modeling tool to visually explore option strategies by modifying expectations of volatility and price. CBOE offers a complete course on the subject. Finally, Tastytrade offers a long running set of shows, tutorials and discussions covering many aspects of options and option trading.
https://www.amazon.com/Understanding-Options-2E-Michael-Sincere/dp/0071817840
You have to know how to identify the inflection points and buy and sell along with the insiders/specialists, instead of with the herd. Richard Ney described it well in The Wall Street Gang. Relevant chapter here.
> To understand the specialist’s practices, the investor must learn to think of specialists as merchants who want to sell an inventory of stock at retail price levels. When they clear their shelves of their inventory of stocks they will seek to use their profits to buy more inventory at the wholesale price levels. Once you grasp this concept you are ready to learn the eight laws of the specialist:
>1. As merchants, specialists will expect to sell at retail what they bought at wholesale.
2. The longer specialists remain in business, the more money they will accumulate to buy stock at wholesale,which they then want to sell at retail.
3. The expansion of the communications media will bring more people into the market, tending to increase volatility of stock prices as they increase elements of demand - supply.
4. In order to buy and sell huge quantities of stock, Exchange members will seek new ways to enhance their sales techniques through the use of the news media.
5. In order to employ ever increasing financial resources, specialists will have to effect declines of ever increasing dimensions in order to shake out enough stock.
6. Advances will have to be more dramatic on the upside to attract public interest in order to distribute the ever-increasing accumulated inventories.
7. The most active stocks will require longer periods of time for their distribution.
8. The economy will be subjected to increasingly dramatic breakdowns causing inflation, unemployment, high interest rates,and shortages of raw materials.
Anna Coulling is easily digestible and a good primer on identifying the patterns, though she seriously needed some editing (should have been half the number of pages). Kindle edition is better than print, which only has the diagrams in B&W.
https://www.amazon.com/Understanding-Options-2E-Michael-Sincere/dp/0071817840
Understanding Options 2E https://www.amazon.com/dp/0071817840/ref=cm_sw_r_cp_api_qr.NBbF490WK3
Option Trading: Pricing and Volatility Strategies and Techniques https://www.amazon.com/dp/0470497106/ref=cm_sw_r_cp_api_Fq.NBbMR04VG1
Dynamic Hedging: Managing Vanilla and Exotic Options (Wiley Finance) https://www.amazon.com/dp/B000UG9JQA/ref=cm_sw_r_cp_api_7q.NBbS126302
There is two ways to go about this. You can pick up a textbook, this book is a staple for new students. Or if you just want a broad and entertaining overview there are plenty of books like "All the Devils are Here" or "The Big Short".
Risk parity with leverage makes a lot of sense- that's exactly what I do with my portfolio.
IB's margin rates are quite cheap, but that's mostly just because other retail brokers are stupid expensive. Have you considered using futures? That effectively gives you leverage at a very competitive rate (way cheaper than even IB margin). Note that taxation is different with futures ("Section 1256").
Consider that leverage can be very dangerous:
All of these arguments suggest keeping your use of leverage very light. The penalty in future wealth of using too little leverage is far less than for using too much leverage.
What you're suggesting could be viable, but you're straying far off the well-trodden path. You need to do tons of research on topics like how futures work, applying the Kelly criterion to investing, fat tails, negative skew, All-Weather and its All-Seasons cousin, balanced portfolios, life-cycle investing, etc. etc. before even thinking about this.
Why not just get the standard options book:
https://www.amazon.com/Options-Futures-Other-Derivatives-10th/dp/013447208X
Richard Bookstaber
https://www.amazon.com/gp/offer-listing/0201001233/ref=sr_1_fkmr1_3_olp?s=books&ie=UTF8&qid=1526365805&sr=1-3-fkmr1&keywords=bookstaber+on+options
Nassim Taleb
https://www.amazon.com/Dynamic-Hedging-Managing-Vanilla-Options/dp/0471152803/ref=sr_1_1?s=books&ie=UTF8&qid=1526365899&sr=1-1&keywords=taleb+options
I'd start with Bookstaber first. Yeah the book is "old" but the basic concepts are the same. Taleb gets more into all the Greek gunk
Finance. I keep saying it and I will say it again - Wall Street hires mathematicians. I have many colleagues who obtained a BMath / BSc in Math and ended up working in finance.
I have a BMath and will be working in finance starting this year solving mathematical finance problems like determining the price and risk of instruments.
Start looking at banks' graduate programs like JP Morgan USA.
I'd recommend Understanding Options by Michael Sincere. That book helped me understand spreads, covered calls, and Greeks.
https://www.amazon.com/Understanding-Options-2E-Michael-Sincere-ebook/dp/B00GWSXX8U/ref=mp_s_a_1_4?keywords=options&qid=1557183764&s=gateway&sr=8-4
It actually does use indicators, and those indicators predict trends.
Mathematical models: I have only studied indicators. In the beginning of my project, I tried to create my own indicators using parametric equations, but it wasn't working. I couldn't get the algorithms to produce results better than random backtests. So I moved from that into real indicators.
Books:
The Ultimate Day Trader
It was the most helpful when I was getting started and learning about indicators. It taught me how trading was done, and it introduced the typical algorithmic trading like MACD crossovers, bullish convergence/divergence. It may be too much for beginners. As a warning, reviewers on Amazon don't think highly of the book.
I had to learn a lot on my own through trial and error and the occasional google search, so I The Ultimate Day Trader is the only book that I fully read.
Building Winning Algorithmic Trading Systems
Gives a lot of good information in getting good backtest results, and the steps an algorithm should have to pass in order to be traded with.
Algorithmic trading: Winning strategies and their rationale.
Currently reading this, and it starts off basic, like most books. It talks about look-ahead biases and that sort of stuff. It also talks about the different backtesting software and programming languages. I'm only on page 40/200, and it looks like it gets more complex.
I also have a few books on options, but those don't have to do with algorithmic trading.
Cool, learning is good. I’m a reader, I recommend picking up a book (fairly up to date one, at least one that was written post-internet era and is still generally applicable in the way option orders work, as it’s certainly different than what a book in the 80s would have said, if there was one). Choice is up to you, search the sub for “recommend books” or something similar and you’ll see plenty of suggestions.
IF you’re a reader, I say go for a book, you’ll read when you wouldn’t be looking online. Also, a good book already sold you, you bought it, and so it pushes no agenda, and the authors is incentivized by sales to have the most informative book, especially in the current retail market where people likely put equal or greater trust in strangers’ Amazon reviews than the vestiges of how it used to be pre-amazon and yelp, ie consumer reports, industry/hobbyist magazines, and word of mouth. I don’t know who the go to for book reviews was, I’m guessing NYT always ran a book critic column, and perhaps trading mags would have reviewed some. Big, needless tangent I’m writing here, but what a change. Anyway, point being, an author should generally just be out to be helpful as good reviews will drive sales. Free books (or even worse, this “Apiary fund” which is really a ‘school’ built to sap you money. See below for a note on the subject) are.not to be trusted, the adage there’s no such thing as a free lunch is pretty much always applicable to investing. Nobody is giving away trade secrets for free.
If you are tempted by a class of some sort, ideally look for something in your town or city that does community adult education. Generally it’ll be $10-50 for this sort of thing, depending on the length. The idea being, community centers and non profits are not trying to squeeze your money, so not only is the lesson cheap, it’s centered on teaching, not selling. Many “free” classes advertised (You’ll see RE investing most commonly, though no doubt people do it for options) are really excuses to get you in a room where you feel trapped and give you the hard sell. Usually some variation of, here’s a tiny bit of info, now to get the real secrets just pay $5000 for this week course, or something similar. Avoid these like the plague, they have no wisdom to offer and just want your cash.
Similar to community adult ed, university related classes also have no hidden agenda, so if you find an options course you could audit or mmmmm or something, you could go for it. I didn’t go to business school or major in economics or anything so I don’t know if they have whole classes on options, but perhaps at least one that covers the market along with options, maybe even futures.
But time-wise, you’ll get the info quickest reading online or reading a book, and you’ll learn quickest by doing, no amount of reading will prep you or teach you as trading will. But you want at least a good background.
For books, I can only recommend from what I’ve read. I’ve read I think 4, 2 stood out:
Understanding Options Ed. 2E by Michael Sincere. It’s not a very complicated book, it’s not teaching you ICs and jade lizards, but it gets you all the basics you need to ask smart questions.
The Only Options Book You’ll Ever Need by Russell Stultz, is my favorite. It starts simple, covering everything the simpler book does, and builds on that. It’s nicely out together for progressive learning, and if you read both, the first book you could eat in a day, and by the 4th chapter or so you’ll be ready to start trading. Then keep reading, since if you go too far with zero experience it’ll not actually stick.
Or, use the help bar here and its resources, the CBOE has great online teaching resources, as does Tastytrade, and others.
Hope that helps steer you in the right direction- good luck!
This book helped me a lot:
https://www.amazon.com/Understanding-Options-2E-Michael-Sincere-ebook/dp/B00GWSXX8U
Also do the opposite of everything this sub suggests :)
Follow this link. Bring $11 with you.
I also have this one very good book
Understanding Options 2E https://www.amazon.com/dp/0071817840?ref=yo_pop_ma_swf
I do eminis occasionally and commodity futures. Books I've/am reading
https://www.amazon.com/Dual-Momentum-Investing-Innovative-Strategy/dp/0071849440/ref=pd_sim_14_2?_encoding=UTF8&pd_rd_i=0071849440&pd_rd_r=SDH1TYFVW1Z3XBZKA33F&pd_rd_w=ZRMkA&pd_rd_wg=gCrIn&psc=1&refRID=SDH1TYFVW1Z3XBZKA33F
https://www.amazon.com/Following-Trend-Diversified-Managed-Futures/dp/1118410858/ref=sr_1_5?ie=UTF8&qid=1491303110&sr=8-5&keywords=trend+following
https://www.amazon.com/Trend-Following-Managed-Futures-Trading/dp/1118890973/ref=sr_1_6?ie=UTF8&qid=1491303110&sr=8-6&keywords=trend+following
https://www.amazon.com/Stocks-Move-Beating-Momentum-Strategies/dp/1511466146/ref=sr_1_8?ie=UTF8&qid=1491303110&sr=8-8&keywords=trend+following
https://www.amazon.com/Managed-Futures-Institutional-Investors-Construction/dp/1576603741/ref=sr_1_3?ie=UTF8&qid=1491303298&sr=8-3&keywords=managed+futures
Someone here recommended me this book awhile ago. It was easy to read and understand and I feel like I learned a lot from it. Would also recommend.
read this book:
https://www.amazon.com/Understanding-Options-2E-Michael-Sincere/dp/0071817840
I’ve read this one but I think it’s out dated by now. I’d look around for a newer equivalent.
Derivatives: An Introduction https://www.amazon.com/dp/0324273029/
If you're just beginning, my personal favorite is "Understanding Options" by Michael Sincere.
Credential: I was a professional options trader, I know Natenberg and he taught me options in a classroom setting.
Natenberg's book is still considered the introductory textbook for professional options floor traders. I think most serious options traders will tell you that the text is dry and dense though. I find it hard to read: "When buying (selling) a put (call), the price of the put (call) will increase (decrease) when the underlying prices goes down (up)."
As a reference text that will give you a strong underlying basis for options and start you on the path to understanding why and how they behave as they do, Hull is second to none: http://www.amazon.com/Options-Futures-Other-Derivatives-John/dp/0138874980
You'll find copies of this around the desks of quants in trading operations.
Taleb's Dynamic Hedging has already been commented on in this thread -- I think its Taleb's best work, but others seem to disagree.
I have a general theory that the hard part about options is TRULY understanding/internalizing options behavior, so last year I started writing a short ebook that is not super technically deep, but gets to the intuitions and motivations behind options pricing and behavior. I wrote most of it on a plane from Europe to the US and never really edited it or worked on it further, but I'd like to polish it eventually.
Would love feedback. https://leanpub.com/options
I started with this...
http://www.amazon.com/Understanding-Options-2E-Michael-Sincere/dp/0071817840/ref=sr_1_2?s=books&ie=UTF8&qid=1452437941&sr=1-2&keywords=options+for+beginners
Then after a year or two I moved on to this...
http://www.amazon.com/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774/ref=sr_1_1?s=books&ie=UTF8&qid=1452438013&sr=1-1&keywords=option+pricing+and+volatility
This is a good reference to keep by your side when thinking about strategies....
http://www.amazon.com/Options-Playbook-Expanded-2nd-strategies/dp/0615308147/ref=sr_1_1?s=books&ie=UTF8&qid=1452438066&sr=1-1&keywords=option+playbook
When you decide you need a faster way to lose money, read up on options.
Start here:
amazon link: Understanding Options
And: WSB guide to not being an options retard
In regards to your question, a short answer would be, it depends. If you purchase that option during the day and the underlying stock is moving towards your strike price, you already have a profit as long as you sale that option that same day and do it quickly. If you wait and the movement of the underlying remains flat, you will notice the value of your option diminishes due to time decay. The estimated decay is described by the theta value of your option. If it has the value of -0.2, then that option will lose 20 cents per day. Theta will increase the closer you are to expiration.
If you wait until expiration or near expiration, the price of the underlying stock must reach the strike price + the premium you paid in order to make even. If this condition is met earlier, then you might be able to make a profit depending on other parameters: time until expiration, strike price, the greeks (delta, theta, gamma, and vega are the more important one), underlying stock price, volatility, and more. I have listed the more important one. I really recommend you this short book if you want to learn more. Understanding Options The author's style of writing is very easy to read.
I've read a lot of these, but I would recommend starting at the bottom and working towards the stochastic books, as they are tedious as all hell. Also depending on what one knows of markets, the bible of instruments might be the best starting place. Options futures, whatever it's called by Hull
The book I use as reference for the material I posted notes on: Mathematical Interest Theory. It's a mediocre book but it gets the job done. My notes cover less than half of what you need to know for FM/2.
My favorite book on finance: John Hull - Options, Futures, and Other Derivatives. This is a must-have for anybody going into finance. Also covers some of the stuff in FM exam.
this what you mean?
https://www.amazon.com/Options-Futures-Other-Derivatives-10th/dp/013447208X/ref=sr_1_2?s=books&ie=UTF8&qid=1525120533&sr=1-2
Books! This is where i started.
Give this a read
https://www.amazon.com/Understanding-Options-2E-Business-Books/dp/0071817840/ref=sr_1_1?ie=UTF8&qid=1498251718&sr=8-1&keywords=understanding+options
I like Kevin Davey's book = https://www.amazon.com/Building-Winning-Algorithmic-Trading-Systems/dp/1118778987/ref=sr_1_1?keywords=Kevin+davey&qid=1558288403&s=gateway&sr=8-1
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Don't really know your level, but what I like about his book is that he is honest and shares an actual trading strategy of his. Lots of good advice in there about the process he follows.
We've all seen those backtests that promise super high compound annual growth, the trick is getting that kind of result on a market that your algo hasn't seen before. Out of sample validation is key.
Please read this before continuing.. its a good crash course. You will murder your account and profits without these core understandings. Remember chinese news and information trump charts. Great first win!
Understanding Options 2E https://www.amazon.com/dp/B00GWSXX8U/ref=cm_sw_r_cp_api_i_.vkDCb9PTYHH7
Understanding Options
You should read building algorithmic trading systems by Kevin Davey
There is tons of information on sizing, risk management, risk of ruin of a strategy and how to automated them
https://www.amazon.com/Building-Winning-Algorithmic-Trading-Systems/dp/1118778987/ref=sr_1_2?crid=2MD5SFTI494L&keywords=kevin+davey&qid=1565714567&s=gateway&sprefix=kevin+da%2Caps%2C217&sr=8-2
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Note: I am not affiliated with Amazon, I don't get commission on the sales :) but it is still a kick a$$ book
I'm a semi informed guy on stocks but totally clueless on options. Just started reading 'understanding options" by Michael sincere. It's a 2014 2nd edition. Seems to be pretty good so far.. seems to be geared toward beginners
http://www.amazon.com/Understanding-Options-2E-Michael-Sincere/dp/0071817840/ref=sr_1_1?ie=UTF8&qid=1395119091&sr=8-1&keywords=understanding+options
Unlikely you'll find such a thing. Read Hull https://www.amazon.com/gp/aw/d/013447208X/ref=mp_s_a_1_1?ie=UTF8&qid=1501755851&sr=8-1&pi=AC_SX236_SY340_FMwebp_QL65&keywords=Hull+derivatives
Any earlier addition will suffice to get the most best understanding of all general classes of assets.
The problem is say you have base asset classes: equities, bonds, currencies and commodities.
The you have options on those.
Then you have futures contracts on those.
The you have options on the futures contracts.
Bonds can be broken to sovereign and corporate.
Corporate can be high yield or investiment grade.
Sovereign can be local, state, national
And it goes on and on and on.
Honestly I would say read a book on it. Use your notepad, your highlighter, make tabs, the works. Read it and then read it again.
I used this
Don’t buy a seat at the table if you’re going to bet on a losing hand.
Good book:
https://www.amazon.com/Understanding-Options-2E-Business-Books/dp/0071817840/ref=sr_1_1?ie=UTF8&qid=1502821413&sr=8-1&keywords=options
How about these books? have you heard anything about them?
http://www.amazon.com/Trading-Systems-Methods-Website-Wiley/dp/1118043561/ref=pd_bxgy_14_img_2?ie=UTF8&refRID=1X0Y2BRSS0H1EWVB5HKC
http://www.amazon.com/Building-Winning-Algorithmic-Trading-Systems/dp/1118778987/ref=pd_sim_14_1?ie=UTF8&dpID=51eM1r6mrRL&dpSrc=sims&preST=_AC_UL160_SR127%2C160_&refRID=0HJDDFQYBW3A4V6WGXXX
You misunderstood the first line.
>The double top is a frequent price formation at the end of a bull market.
Double tops are major formations not noise fluctuations.
EDIT: If you want to learn T.A., here is a good place to start. http://www.amazon.com/Schwager-Futures-Technical-Analysis-Jack/dp/0471020516
I'm 21 myself and like to be hands on with trading which seems to be what you want. You should look into trading weekly options. This is a book that's pretty good for covering all the basics Feel free to message me if you have any questions.
Buy and read this book: Understanding Options 2E (Business Books) https://www.amazon.com/dp/0071817840/ref=cm_sw_r_cp_api_I7GIzb6CB2EJ9
I thought this book was really good: https://www.amazon.com/Understanding-Options-2E-Business-Books/dp/0071817840
Also, watch all the videos and read all the links that are associated with options on Investopedia.com. Its a great resource.
Tobias Carlisle written a bunch of books and runs a fund (ZIG) based on his multiple. He might be a good place to start on long/short value investing. You weren't exactly clear on what sort of long/short you were looking for.
I leaned a lot years ago from an early edition of: https://www.amazon.com/Options-Futures-Other-Derivatives-10th/dp/013447208X
That book is very mathy but if you want to learn how to think about splitting investments into pieces of risk this is the place.
A similar book https://www.amazon.com/gp/product/0471786322 gets excellent reviews
This
This book is pretty good.