Following the publication of the Black-Scholes formula and the opening of the first options exchange during the 1970's, this was one of the first serious textbooks published on options. Written by two leading theorists of option pricing theory, it became an instant classic. Even today, it is widely read for its clear explanations, discussions of how to implement the Black-Scholes formula or detailed analysis of vanilla options price behavior.

The book is divided into eight chapters. The first defines put and call options and uses payoff diagrams to describe trading strategies. The second discusses determinants of option values and introduces put-call parity. Chapter 3 describes how options are traded on exchanges. The next two chapters are more theoretical, presenting general arbitrage relationships that apply to options and presenting the Black-Scholes option pricing formula. Chapter 6 describes how traders can use the Black-Scholes formula to support a variety of trading strategies. The last two chapters cover more advanced topics: non-vanilla options, including some exotics; alternative descriptions of stock price movements; and implications of options for portfolio theory.