One of my friends at work asked me if I had any book recommendations for learning about stocks and options.
Mentally, I break trading down into two general classes of trading: index-type and “exotic” trading.
By exotic trading, I mean picking individual stocks/options and actively trading.
This runs counter to the more conservative buy-and-hold, index-based, hands-off approach.
For the exotic trading, I learned most of what I know from a class with Professor W.E. Olmstead and his book, Options for the Beginner and Beyond: Unlock the Opportunities and Minimize the Risks.
For the option-uninitiated, the basic idea is that instead of buying or selling stocks directly, you buy and sell contracts that give you the right (but not obligation) to buy or sell the stock at a particular price by a particular date.
That’s a mouthful and options are indeed subtle beasts, but they allow the flexibility to either hedge risks you want less exposure to, or increase/leverage exposure to risks you do want to take.