"McMillan on Options" is a rare kind of book, and one of the very best. Especially revealing are the discussions in Chapter 4, "The Predictive Power of Options", on how certain patterns of option trading volume and implied volatility can be tip-offs to insider activity and sharp moves in the underlying stock, and on how to take practical advantage of such patterns. The chapters on trading systems and on how to trade volatility and the volatility skew were also well written and useful to the active options trader. All in all, I would recommend this book to anyone seriously contemplating getting involved in the options game.
In fact, "McMillan on Options" and "Options as a Strategic Investment" (a real classic, also by McMillan), were among the very few options books that I made reference to in my own recent work ("Advanced Option Pricing Models", McGraw Hill, Feb 2005)
Jeffrey Owen Katz, Ph.D.
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| As a ROP (registered Options principal) I feel I am uniquely qualified to review this book. First, understand that Larry McMillan is considered by many to be the best options mind on Wall Street (sorry Bernie Schaeffer). His knowledge of this less-than-logical derivative investment is the equivalent of Alan Greenspan’s knowledge of the economy. My assessment: this is a good book. McMillan covers virtually every aspect of options trading: history, terms, strategies, volatility, theoretical approaches, etc. I am particularly impressed by Larry’s use of historical examples to bring complicated strategies down to basic levels. This is not to say this is an easy read. An easy investment read is Peter Lynch’s "One Up on Wall Street". McMillan on Options is more like a doctor’s guide to brain surgery: the pictures are cool but the content can be complicated. Topics covered include spreads (verts, calendar, diagonal), straddles, combos, the greeks (delta, rho, theta, vega and gamma) and strategies that employ these. If volatility is your life, and you hold a hefty position in Rolaids futures, then this book is for you. I have not read a more comprehensive, useable options book. I believe all options traders and speculators should own McMillan on Options. |
