Options Explained Simply: A Step-by-Step Guide to Options and Futures from First Principles

THE WAY OPTIONS SHOULD HAVE BEEN EXPLAINED IN THE FIRST PLACE

Q: You buy an ATM European option on oil. The oil price fluctuates but ends back at strike. How can you profit?
Q: When would you early-exercise an option?
Q: Do professional traders buy calls because they expect the stock price to rise?

Still struggling to understand options? You're not alone.

If you’ve ever tried to learn options and felt overwhelmed by complex formulas or books that assume too much, this book is for you.

Options Explained Simply is a clear introduction to options, futures, and derivatives, built from first principles using plain English, simple mathematics, and real-world examples. You’ll develop an intuitive understanding of how these instruments work — and why they have value.

No advanced maths.
No abstract theory.
No prior finance background required.
Just explanations that make options finally click.

Inside this book, you’ll learn:
• What options and futures really are
• Why derivatives have value
• How markets, risk, and uncertainty interact
• How option prices respond to changing conditions
• The core ideas behind professional derivatives thinking


This fourth edition includes a new chapter on Gamma, one of the most important concepts in options trading.


About the Author
Balbinder Chagger has over fourteen years of professional experience working with derivatives in international investment banks and is a qualified secondary-school mathematics teacher.