Options as a Strategic Investment 5th Edition Review
4.7 / 5
Overall Rating
Options as a Strategic Investment: Fifth Edition
McMillan's encyclopedic options reference. Not the first book to read, but the one you keep on the shelf and consult for years.
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TL;DR
Lawrence McMillan's Options as a Strategic Investment (5th edition) is the encyclopedic options reference traders return to for the rest of their careers. It's not the book to read first — it's the book to read after the basics make sense. Every strategy you'll consider (covered calls, verticals, iron condors, butterflies, calendars, ratio spreads) is covered with payoff diagrams, breakeven math, and notes on when each works.
Why It Matters
Most options books teach a handful of strategies and stop. McMillan's strength is range — he covers strategies most retail traders never use, with the math to evaluate them honestly. The 5th edition adds modern context (volatility products, weeklies, ETF options) without abandoning the foundation. If you're going to trade options seriously, this is the reference.
Key Specs
- Author: Lawrence G. McMillan
- Edition: 5th (most recent)
- Pages: ~1,072
- Publisher: Prentice Hall
- Format: hardcover, ebook
- Reading time: 60-100 hours (encyclopedic, not linear)
Pros
- Most thorough options reference in print
- Payoff diagrams and math for every strategy
- 5th edition addresses modern products and volatility
- Honest about when strategies work and when they don't
- Useful as a working reference for years
- McMillan has skin in the game (decades of trading)
Cons
- Length is intimidating — not a starter book
- Some chapters dense with notation
- Examples occasionally lag market product changes
- Repetitive in places where strategies overlap
- Hardcover is heavy and unwieldy
Who It's For
Intermediate to advanced options traders. Anyone who has read a basic options book (Cohen, Sincere, or similar) and wants to go deeper. Volatility traders. Skip it if you're brand new to options or only trade buy-and-hold equities.
How to Use It
Don't read cover-to-cover. Use the table of contents as a strategy index. When considering a new strategy (e.g., iron butterfly), read just that chapter, work through the math, then paper-trade before risking capital. Re-read the volatility chapters every couple of years.
How It Compares
Vs. Option Volatility and Pricing (Natenberg): Natenberg is the math/theory bible, McMillan is the strategy bible. Read both. Vs. The Options Playbook (Frederic Ruffy): Playbook is starter-level, McMillan is reference-level. Vs. broker education content: free content covers basics; McMillan covers depth.
Bottom Line
The definitive options strategy reference. Buy it as your second or third options book. Skip it if you're not yet comfortable with basic options Greeks.
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