I have received quite a few books to do book reviews, and frankly I have been dropping the ball. BUT no more! I plan on doing regular book reviews. I am not going to do stars or ratings because they are silly. You can’t just say a book is 5 stars if all of your reviews are 5 stars. I will use a standard format that lets you quickly see the good and the bad of the book and it will be brief so that you can quickly understand whether or not you would like this book.
So lets start with the book, “The Complete Guide To Option Selling”, by Cordier and Gross (not me, and no relation).
The Good:
Easy to read
Easy to follow
Useful information
Focused
The Bad:
Since I use this strategy in my own personal portfolio I was a little disappointed with lack of numbers, formulas, and calculations.
This book was great for me though I had read John Hull before and for the most part understand option pricing.
Overview:
This book is about selling options and collecting their premium to earn a return. You can read this book and put this strategy to work because the authors do a fantastic job of explaining everything you need to get this strategy to work. They even give you guidelines on what you should and should not do.
Usefulness:
I feel that this book is useful because it gives you the real working knowledge to employ a particular strategy. Though the reason why I think this book and strategy are unpopular is because people are greedy and trying to make more money. As the authors outline this book is not about making 200% per month. It is about making money consistently.
The book is very useful only if you are trying to sell options. But there is one thing I would be concerned about and that is consistency in returns. They don’t outline how you could create a formula or a calculation that says this much return for this much risk. The strategy itself is a risk management strategy and not trading strategy. For edition 3 I would emphasis to the authors building some calculations and going through them.
Complementary:
This book is not complementary to any other book. It defines a strategy that stands out on its own. The only situation where I would find this strategy to be complementary is with long term investing. But sadly the book does not delve enough into this detail. Though I suppose they would have to cover many other topics such as event risk management.
Additional Information:
For a good understanding of option calculations and their associated risks: Fundamentals of Futures and Options Markets and Derivatives. (Warning this book is heavy math and you will need to understand calculus, and algebra.)