The Options Trading Body of Knowledge: The Definitive Source for Information About the Options Industry
$18.32
The Options Trading Body of Knowledge is an expansive and reference-driven guide to the structure, terminology, mechanics, and institutional framework of the global options industry. Michael C. Thomsett presents a comprehensive knowledge base designed not merely for retail traders, but for professionals seeking a structured and authoritative understanding of how options markets function at every level.
Unlike strategy-specific trading manuals, this work focuses on the complete ecosystem of options trading. It explores listed and OTC options, exchange operations, clearing systems, regulatory bodies, contract specifications, pricing conventions, and margin structures. Thomsett systematically defines industry terminology, ensuring readers understand both operational and strategic dimensions of derivatives markets.
A central component of the book is its treatment of pricing mechanics and risk exposure. Concepts such as implied volatility, time decay, intrinsic and extrinsic value, and the Greeks are explained within institutional context. Rather than isolating theory, the author demonstrates how these factors interact within professional trading environments and regulatory frameworks.
The book also addresses trading strategies, but within a broader industry lens. Covered positions, spreads, combinations, synthetic constructions, and volatility-based strategies are discussed as structured applications within the larger options infrastructure. The emphasis remains on clarity, accuracy, and definitional precision.
Functioning as both an educational resource and professional reference manual, The Options Trading Body of Knowledge equips readers with a foundational and advanced understanding of the derivatives landscape—bridging operational knowledge with practical application.
✅ What You’ll Learn:
- How listed and OTC options markets operate
- How exchanges, clearinghouses, and regulatory bodies function
- How options contracts are structured and standardized
- How volatility and the Greeks impact pricing behavior
- How margin requirements and settlement procedures work
- How common option strategies fit within the broader market framework
💡 Key Benefits:
- Provides a complete industry-level understanding of options markets
- Strengthens technical and operational literacy
- Enhances strategy execution through structural clarity
- Reduces misunderstandings about margin and settlement mechanics
- Serves as a long-term professional reference guide
👤 Who This Book Is For:
- Options traders seeking comprehensive industry knowledge
- Financial professionals working with derivatives
- Advanced retail traders expanding structural understanding
- Students of financial markets and derivatives
- Not suitable for casual traders seeking quick-entry strategies
📚 Table of Contents:
- Market Overview
- Market Risks
- Elements of Value
- Return Calculations
- Options and Stock Selection
- Option Taxation
- Option Strategies
- Option Print Resources
- Option Glossary
The Options Trading Body of Knowledge: The Definitive Source for Information About the Options Industry By Michael C. Thomsett
| Author(s) | |
|---|---|
| Product Type | Ebook |
| Format | |
| Skill Level | Intermediate to Advanced |
| Pages | 280 |
| Publication Year | 2009 |
| Delivery | Instant Download |
5 reviews for The Options Trading Body of Knowledge: The Definitive Source for Information About the Options Industry
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Sierra Galindo (verified owner) –
Thomsett’ book may be viewed as three books in one or as a three part book;
Part 1 (first 80 pages) provides a concise and clear expose of what every trader/investor needs to know about securities (stocks and options) as elements of a well managed portfolio for a high rate of return with manageable levels of risk. Part 2 (110 pages) lists most any options strategy that you can think of, in a format suited for review and reference. Part 3 (90 pages) provides a comprehensive glossary and reference list for books and on-line sources for option traders.
Thomsett’s introduction to History of Options is fascinating, especially since it refers to Aristotle’s `Politics’ from 350 B.C. and Tulipmania in 1637 AD, elucidating an excellent distinction between well thought out strategy vs. greed driven crowd following. The entire presentation is excellent. I wish the numerous paragraphs of prose were also interspersed with a few more figures to break up the monotony of thousands of words, albeit strewn with pearls of clear wisdom in almost every paragraph. Mr. Thomsett has a way with words; example- `any position with both calls and puts that is not a straddle is classified as a combination.’
The term `extrinsic value’ has multiple definitions, but I like Thomsett’s choice to keep Time Value distinct from extrinsic value, the latter being attributable primarily to implied volatility. Other authors appear to have left it entirely to Thomsett to point out that `options are one of the few alternatives for offsetting the inflation and tax risk combination without violating your own risk tolerance level.’ While there is a dearth of figures, there is an abundance of tables with valuable information such as `Breakeven Rates’ of gain to offset Tax and Inflation Risk (Table 2.1).
Given my penchant for mathematical equations, I was pleasantly surprised to find that Mr. Thomsett has successfully presented `Elements of Value’ for options without the need for Black-Scholes Equation (which is, of course, included in the extensive Glossary). The author has successfully demonstrated that `traders will improve their overall portfolio performance by defining their goals in advance’. The simple formulas the author uses to calculate annualized returns for correct choice of options and other useful metrics are well within the average reader’s grasp.
The discussion of option strategies in Part 2, would be more amenable to a greater number of readers if Mr. Thomsett chose to cover the simplest strategies (such as Long Call, Long Put, Covered Call and Married Put), up front to introduce the notation and the profit/loss charts without having to muddle through Alligators (in A-C group) to get to the Long Call in D – P group.
In summary, this book is definitely worth owning by every option trader interested in good portfolio performance.
Briella Saunders (verified owner) –
Best ever
Sadie Harvey (verified owner) –
This is only the intro and first chapter, but it does a good job of explaining the basic terms of options trading. We’ve been considering doing some options trading, but I couldn’t seem to follow my husband’s explanation of how they worked. The author does a pretty good job of explaining with examples.
Bradley Cox (verified owner) –
The book is an ok review or reference book, but for the beginner, go with Getting Started in Options , much better! This title is one to add to complete your info source. But McMillan Options as a Strategic Investment is much better resource.
Kaiya Howell (verified owner) –
Great Book a must have for any trader.