McMillan on Options 2nd Edition

McMillan does an excellent job of explaining options and its characteristics. He delves into the many different applications as well as the different strategies. More importantly, he gives a thorough analysis of the strategies as well as the concepts. This is a book for a trader or investor who wants to gain a deep and thorough understanding of options and what it can do for the bottom line.His book is one of the best and most comprehensive of stock and futures options. You won't regret buying it.

Filled with great examples, this book brought me from practically no knowledge of options up to a point where I am now comfortable using options as another investment strategy. A great read, McMillan builds your knowledge steadily. Even if you decide you may not actually trade options, knowing the signals from the market by following options is another valuable tool for the investor.

I have not read a more comprehensive book on options trading. Just the overview of option strategies (Chapter 2) has more information on options than any book that I have reviewed on Amazon. Although I do not regret buying this book and reading every one of its 648 pages, it may not be right for everyone.A Bit Expensive and a Bit Outdated. You may not want to pay 79.95 for a book that was first published in 1994. In the second edition, which was published in 2004, McMillan adds a few more example trades, but the bulk of the book remains dated. For example, options are priced as fractions rather than decimals, and terms like "high" and "low" would assume new meanings when applied to more recent markets.When discussing high and low volatility (page 283), McMillan states he rarely has seen the CBOE volatility index (VIX) trading below the historical volatility of the S&P 100 (SPX). Last year the VIX traded below the SPX volatility for at least three months (May, June and August). In other words, last year's market was far more volatile than the markets upon which this book is based.Not for Beginners. Several reviewers suggest that this book might frustrate beginners to the point that they would no longer want to trade options. I found the book readable, but McMillan should not have assumed that readers understand the difference between equities and futures; particularly when most beginners do not trade futures. Also, many of his strategies for trading equity options do not work for futures (and vice versa).Impractical Advice. I was disappointed with McMillan's discussion of the Greeks (page 483) particularly Delta, Gamma and Vega. While he clearly explains how to balance a position to be Delta/Gamma neutral with limited Vega risk, he fails to reveal the practical advantages of doing so.Supposedly, a position that is Delta/Gamma neutral would be less sensitive to price movements of the underlying asset and more sensitive to changes in the asset's volatility. However, to achieve this neutrality, I had to increase the size of the position far beyond what I was willing to risk. One of McMillan's neutral positions, which also limits vega risk, comprises 555 contracts (page 505). The commission alone on such a trade would be well over $1,000.00. In his summary, McMillan concedes that these are "theoretical examples" (page 516). However, none of McMillan's real trades appear to apply this theory.Despite these problems, this book is well-worth having, and more importantly, it will make you a better trader.

This is an extensive manual about the ins and outs of option trading. While much of the examples are dated over twenty years ago, the principles still hold true. The explanation of different strategies and the use of the Greeks for evaluation of each strategy is more thorough than I've seen anywhere else.The book is a bit long. Many examples go on for several pages. Some concepts are a bit much to determine a practical use.Keep in mind that this is not a book for beginners. This is for readers with a decent background in trading and some experience in options. It also is not a book to read once and set aside. I found myself flipping back a number of times to review material that I didn't fully grasp the first time through. I also noticed a lot of subtlety of important factors when I read through sections again. Often I would try an approach presented and have some success, but then realize that there was more to the strategy that I missed. With additional insight I could be more consistent in successful trading.Two particularly helpful sections were the explanations of the use of back spreads, and gamma neutral calendar spreads. I had not encountered these approaches before and they are both very powerful in low volatility environments.I see this book as one I will likely refer back to periodically to keep learning.

Think of this as the Bible for the options trader. It's the word from the God of Options trading.I think at least half of the book is common sense, but then again, I learned options trading when I was in my mid-late teens.Well written, put together, organized. My only suggestion is to the publisher - make it cheaper!

This book I would say is a must read for serious aspirants to options trading. Having said that, it falls way short of the masterpiece from Sheldon Natemberg. Moreover, the book is outdated in its examples, more stories than text book material.

Probably the best book on options that I have read. Very good book. It's a bit of a learning curve but full of information.

McMillan's 2nd edition is the definitive text for basic and advanced option theory, strategy and practice. It was a required textbook for a options class at UCLA.I highly recommend it for the new student and intermediate trader who needs a comprehensive reference book to obtain a grounding in options. The advanced trader will find it helpful to evaluate additional strategies to add to their options trading.