McMillan on Options, Second Edition (Wiley Trading) [Hardcover]

Lawrence G. McMillan (Author)

Book Description

Series: Wiley Trading | Publication Date: September 2004

Legendary trader Larry McMillan does it-again-offering his personal options strategies for consistently enhancing trading profits

Larry McMillan's name is virtually synonymous with options. This "Trader's Hall of Fame" recipient first shared his personal options strategies and techniques in the original McMillan on Options. Now, in a revised and Second Edition, this indispensable guide to the world of options addresses a myriad of new techniques and methods needed for profiting consistently in today's fast-paced investment arena. This thoroughly new Second Edition features updates in almost every chapter as well as enhanced coverage of many new and increasingly popular products. It also offers McMillan's personal philosophy on options, and reveals many of his previously unpublished personal insights. Readers will soon discover why Yale Hirsch of the Stock Trader's Almanac says, "McMillan is an options guru par excellence."

Editorial Reviews

From the Publisher

Thousands of investors turn to Larry McMillan, leading finance writer and advisor, for expert advice on options. In this reader-friendly book, McMillan offers the latest information on the high-profit world of options trading. This up-to-date guide provides an information-hungry marketplace with in-depth coverage of pricing strategies, volatility and risk control, hedging techniques and option philosophy, as well as key insights into the predictive power of options, the versatile option and buying and selling. Real-world examples provide hands-on applications and clear illustrations to turn theory into practice. --This text refers to an out of print or unavailable edition of this title.

From the Inside Flap

The McMillan name is virtually synonymous with options. Over the years, this legendary trader’s popular and informative books, newsletters, and seminars have helped both new and seasoned investors use options to consistently enhance their trading profits.

McMillan first shared his personal options philosophies and techniques in the original McMillan on Options. Now, in this revised and expanded Second Edition, he reveals a number of new approaches for success in today’s fast-paced and ever-changing investment arena.

By exploring both the flexibility and predictive ability of options, this highly revised resource will show you the best new ways to apply options to everyday trading situations. You’ll quickly learn how to establish self-contained strategies, substitute options for other financial instruments, and protect your positions–whether in stock, index, or future options. More importantly though, you’ll receive a complete education in the exciting new products that are popular with investors, from single-stock futures and exchange-traded funds to LEAPS and the brand new volatility futures.

Backed by over 100 case studies, updated charts, and new examples, McMillan on Options, Second Edition:

• Illustrates how a stock can be "pinned" to a striking price at expiration, what causes it, and when to expect it
• Discusses put-call ratio charts and theory on individual stocks
• Examines how to use volatility indices as an accurate market predictor
• Adapts trading systems and strategies–such as intermarket spreads and seasonal trading systems–to the realities of a new market environment
• Presents advanced approaches to options trading, including the concepts of expected return and Monte Carlo probability simulation
• Offers guidance for those who need to find reliable options trading data and tools online

This timely Second Edition also expands on discussions regarding the NYSE as a faulty indicator, the history of market volatility, and the importance of buying and selling volatility.

Readers can now gain a unique insight into McMillan’s personal philosophy on options, and discover the innovative new tactics and strategies he applies to his own trading and analysis. Packed with hands-on examples and techniques that address hedging and volatility–plus fresh new pricing concepts–this comprehensive and updated work will help you understand and unleash the full power of options.

See all Editorial Reviews

Product Details

• Hardcover: 672 pages
• Publisher: Wiley; 2nd edition (September 2004)
• Language: English
• ISBN-10: 0471678759
• ISBN-13: 978-0471678755
• Product Dimensions: 9.3 x 6 x 1.4 inches
• Shipping Weight: 2.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.2 out of 5 stars  See all reviews (30 customer reviews)
• Amazon Best Sellers Rank: #245,295 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

97 of 103 people found the following review helpful:

5.0 out of 5 stars Exercise your option and buy this book!, June 21, 2001

By 

Lance Mead (Traverse City MI) - See all my reviews

This review is from: McMillan on Options (A Marketplace Book) (Hardcover)

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.

32 of 34 people found the following review helpful:

5.0 out of 5 stars Not for beginners, December 16, 2006

By 

Carl F. Mclaren Jr. (Haines City, Florida USA) - See all my reviews
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Amazon Verified Purchase

This review is from: McMillan on Options, Second Edition (Wiley Trading) (Hardcover)

Some of the negative reviews sounded like they wanted a short book that said "Do the following and you will be very rich very quick". Guess what, that book doesn't exist and will never exist. Options are very useful if used properly but to use them properly you need a deep understanding of risk and the mechanics of options. These concepts are mathematical in nature and so is this book. For a variety of reasons just buying a bunch of options is a suckers game as many have learned, but used to reduce risk as a hedge is a different matter. McMillan's other book Options as a Strategic Investment would be the place to start learning. This advanced text explains many things professionals are doing and gives insight to why the markets behave as they do. If you want to get involved with options you need to understand this book thoroughly.

42 of 47 people found the following review helpful:

5.0 out of 5 stars Nitty-gritty street smarts for options traders, December 22, 2004

By 

Dr. Jeffrey O. Katz - See all my reviews
(REAL NAME)   

This review is from: McMillan on Options (A Marketplace Book) (Hardcover)

"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.