Financial Bookstore
An Introduction to Futures and Option Markets by John Hull
Hull provides an excellent introduction to the basics of Option Pricing. Starting with a history of option markets, he then covers forward and future contracts before looking at option markets including stock options, stock index, currency and interest rate options
Pricing models covered include the standard Black-Scholes and Binomial models.
Also by the same author, considered to be the Option Pricing bible : Options, Futures and Other Derivative Securities (however for a more readable advanced coverage we would recommend the Gemmill or Chriss books).
Black-Scholes and Beyond - Option Pricing Models by Neil A Chriss
As the title states, Chriss takes the standard Black-Scholes model and then looks at other techniques which can be used to price options. This book covers Black-Scholes very well, but buy it for the excellent coverage of binomial trees and implied volatility trees. This book contains the best explanations of binomial tree theory that we have seen.
There is also an interactive toolkit to accompany the book.
The Intelligent Investor by Benjamin Graham
The classic text on value investing. Warren Buffet is a real fan..........need we say more ?
Buffett - The Making of an American Capitalist by Roger Lowenstein
The definitive on the life and investing style of one of the most famous investors this century. An excellent read, explaining some of the reasons behind Buffett's phenomenal success and his investment strategy.
Buffett modelled his early investment approach on the value based style espoused by Benjamin Graham in the book above.
Beating the Street by Peter Lynch with John Rothchild
Another investment guru, like Buffett and Graham, produces a book describing his investment approach. Lynch is honest enough to admit his mistakes and his lucky calls. Nevertheless to have achieved the impressive returns he has, takes a lot more than luck, and in the book Lynch explains his approach.
Reminiscences of a Stock Operator by Edwin Lefevre
A classic investment text, thought to be the story of Jesse Livermore who made and lost multi million dollar fortunes many times in the early 1900's. Livermore was an out and out speculator, but had an ability to 'read the tape' which allowed him to call the market with remarkable accuracy.
Read this book to understand the trials and tribulations of being a market player. The book may be old but the emotions are still valid today.
The Investor Chronicle Guide to Charting by Alistair Blair
The best introduction we've seen to the subject of Technical Analysis. Whether you believe in charting or not, this is an excellent read and will get you up to speed on charts from moving averages to candle charts.
We're not yet convinced by charting, but loved the book.
Financial Engineering by Lawrence Galitz
A heavyweight tome on a heavyweight subject. Galitz covers shows how a diverse range of financial instruments can be used to manage risk. Instrument coverage is wider than in many of normal options texts, particularly on Swaps and FRAs.
Options as a Strategic Investment by Lawrence G McMillan
Looks at options from the point of view of the investor. Covers the standard option models, but only gives the relevant formulae. Intended for investors with some option familiarity , particularly if you are thinking of trading options yourselves.
Don't make this your first option book, but make sure you read it soon after !
The Complete Guide to Option Pricing Formulas by Espen Gaarder Haug
If you want or need to work with Option Pricing Formulae, but do not need any of the theory beneath, then this is the book to buy. Haug supplies option pricing models for everything from European options to Interest Rate options with many exotic options in between.
Not an introductory book. Includes option models implemented in Excel.
The Motley Fool UK Investment Guide by David Berger (and the US Fools)
The UK Chapter of those zany US Fools continue to produce excellent investment ideas. This book will convince you that you too can invest in the stock market, making money and having fun at the same time.
David Berger's style allows him to introduce some advanced techniques in an introductory book without confusing the reader.
Technical Analysis Explained by Martin J Pring
A more thorough coverage of Technical Analysis that that provided by the Blair book above. Pring covers all the main TA subjects in depth in the first section: financial cycles, trends, price patterns, moving averages, momentum indicators and oscillators and point and figure charting.
In the second part of the book, Pring investigates the market structure and specific international markets and factors affecting them.
What Works on Wall Street by James O'Shaughnessy
An in depth analysis of common strategies e.g. low p/e ratios using historical data as far back as 1952. Proves that outperforming the indices can be achieved using some simple rules and also shows why some strategies look great over a 5 or 10 year period but under perform over a longer timeframe.
Don't expect any rocket science, but this book will get you thinking about your investment approach in new ways.
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