How to Make Profits Trading in Puts and Calls

In How to Make Profits Trading in Puts and Calls, W.D. Gann unlocks one of his most practical guides to speculative market strategy. Written in 1937, this rare booklet explains how traders can use “Puts” and “Calls” not merely as speculative tools but as instruments of insurance and risk limitation — allowing participation in market moves with clearly defined exposure. Gann’s method emphasizes disciplined preparation, understanding of market structure, and the mathematics of probabilities that govern all successful trading.

The work begins by defining Puts and Calls as contracts that allow traders to profit from directional moves while capping potential losses to the cost of the premium. Gann explains how these options mirror the psychology of buying insurance — you pay a small, known cost to protect against large, unknown risk. He then moves deeper into applied strategy: how to time purchases near double or triple bottoms, how to identify reversals through geometric resistance, and when to use “Spreads” or “Straddles” to capture volatility.

Gann’s teaching transcends mere theory. Through real examples — such as Chrysler, U.S. Steel, and Douglas Aircraft — he illustrates how traders could multiply capital by combining technical chart signals with option tactics. He even describes selling Puts and Calls to collect premium income, showing both sides of the market as legitimate, mathematical opportunities.

This concise volume is a masterclass in controlled speculation. It bridges Gann’s geometric and cyclical analysis with option-based money management — a balance of timing, proportion, and discipline that remains timeless for modern derivatives traders. For students of Gann’s methods, it is not only a lesson in trading mechanics but also a profound reminder that knowledge and preparation, not prediction, are the real foundations of success.