Here are a few of my favorite option trading books in order of complexity.
Options: Essential Concepts, Third Edition by The Options Institute. The Options Institute was formed by the various option trading exchanges to educate retail and institutional clients. This option trading book gives an overview on the history, pricing, strategies, floor operations and Market Making. It is easy to read and it provides an excellent foundation.
Options for the Stock Investor, by James Bittman. This option trading book goes through many of the basic option trading concepts and the terminology. James is an instructor at The Options Institute and he has decades of experience. He is one of the most knowledgeable authors in the industry.
Options As a Strategic Investment, by Lawrence McMillan. In short, this book is known by many as the "option trading Bible". I have read it cover-to-cover many times. It is detailed and comprehensive. It explains every option trading strategy and every option pricing concept. If you read it and understand half of it, you will know more than 90% of the people engaged in option trading.
McMillan on Options, Second Edition by Lawrence McMillan. Larry is one of the foremost authorities on option trading. In this option trading book he rolls up his sleeves and dives into some of his favorite option trading strategies. He uses examples to illustrate his approach.
Option Volatility and Pricing: Advance Trading Strategies and Techniques, by Sheldon Natenberg. This option trading book gets into serious option trading strategies and you need to have a good understanding of the basics.
As I mentioned before, to be a good option trader, you need to be a good stock trader first. Start with basic books on technical and fundamental stock analysis and then work your way up.
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