Online options trading is fast becoming a popular way of trading options. It is fast and easy. Options trading is quite similar to futures trading. They both involve the process of buying stocks at a pre-determined price and selling them on the marketplace when the price is higher than what they were brought for.
Online options trading eliminate the need for face to face option trading. You can simply log in to your favorite online options trading website and do all your various transactions easily at the click of a few buttons.
In fact, I feel you will save more time doing online options trading since you save yourself the hassle of meeting your client or broker and can instead spend more time researching and analysis the various options and stocks.
Plus, nowadays most online options trading websites provides teleconference or even video conference facilities for you to communicate with your broker or client.
Real-time Online Options Trading
One of the biggest advantages to online options trading is that you can get real-time updated statistics on the options market just like the stock market. You can monitor and observe trends right from the comfort of your own home. And if you need assistance or needs to seek advice, you can use email, helpdesk, instant messaging or even skype to communicate with your broker or fellow investors.
Online Options Trading Forums
Options trading forums allows you to discuss options trading with fellow like minded investors. It is a good place for beginners new to options trading to hang out and learn from other more experienced investors.
In fact, I often learn about the latest option trading technique from forums and from other forum members. However you should not take any advice given as the truth, be sure to test it yourself or ask your broker for clarification.
Online options trading provides so many benefits over traditional trading and it is not difficult to get started since many online options trading websites provides faqs and how to manuals to get you started.
more info : stockoptions.optionsebook.com
Monday, January 12, 2009
Stock Options Trading Explained
New and small investors alike can easily get involved in stock options trading. Nevertheless there are many pitfalls and questions that need to be asked regarding options trading. If you are just getting started with options trading, you might at this point feel a bit overwhelmed. This is especially so since there are many choices with options and a multitude of ways to trade these same options.
To start trading it is advised that you have at least a minimum capital of US$5,000 to trade options. Then it is essential that you practice good money management with this capital.
For instance, if you allocate only 5% of your trading capital on every trade and you happen to lose 3 trades in a row, you would have lost 15% of your capital & still have 85% of your capital left.
The lower you traded down your capital, the higher the percentage of gain you have to achieve in order to recover your trading capital.
Here is a stock options trading tip. As stocks near the ends of their quiet periods, they tend to steadily rise in price in anticipation of the `strong buy` recommendations most will receive from their underwriters after the quiet period ends.
When learning about options trading, it is important to familiarize yourself with all the different types of options contracts that are available.
Stock and option traders that take the time to learn and apply a few simple strategies that are available through options put themselves in a better position to assess risks in the markets and potentially put themselves into positions to profit substantially
more info : tradingoptions.optionsebook.com
To start trading it is advised that you have at least a minimum capital of US$5,000 to trade options. Then it is essential that you practice good money management with this capital.
For instance, if you allocate only 5% of your trading capital on every trade and you happen to lose 3 trades in a row, you would have lost 15% of your capital & still have 85% of your capital left.
The lower you traded down your capital, the higher the percentage of gain you have to achieve in order to recover your trading capital.
Here is a stock options trading tip. As stocks near the ends of their quiet periods, they tend to steadily rise in price in anticipation of the `strong buy` recommendations most will receive from their underwriters after the quiet period ends.
When learning about options trading, it is important to familiarize yourself with all the different types of options contracts that are available.
Stock and option traders that take the time to learn and apply a few simple strategies that are available through options put themselves in a better position to assess risks in the markets and potentially put themselves into positions to profit substantially
more info : tradingoptions.optionsebook.com
Put Options Explained
Put Options make you money when the underlying stock price falls. The easiest way to define puts is to compare them to shorting stocks, except the risk is a lot less. So in a nutshell, put options allow you to profit from depreciating stock prices for a fraction of the shorting costs.
The 3 things to know about put options are:
Break-Even Point - It's simply a fixed price level on the underlying stock, comparable to a watermark in a bucket.
Strike Price - Like a waterlevel in a bucket, plus also determines the premium paid for the put options contract.
Movement in Underlying Stock - changes the value of your put options dynamically.
Types of Put Options
There are naked puts, which means you don't own the underlying stock, and covered puts where you actually own the underlying shares. Each type of put option varies in risk based on the quality of the underlying shares, the strike price which the options are held, and the options expiration date.
Put options degrade in value over time as the puts reach expiration, so it's best to buy long put options at least 3 months in advance to avoid quick losses. As the expiration date nears, the value of your put options depreciates fast.
Making Money from Overvalued Stocks with Puts
Put options is how corporate executives and hedge fund managers make so much money when stocks dive in value. They bet big on the puts, in hope that the stock price will fall. You make the most money on puts when the underlying stock is grossly overvalued, allowing you to profit from a selloff.
more info : optionstutorial.optionsebook.com
The 3 things to know about put options are:
Break-Even Point - It's simply a fixed price level on the underlying stock, comparable to a watermark in a bucket.
Strike Price - Like a waterlevel in a bucket, plus also determines the premium paid for the put options contract.
Movement in Underlying Stock - changes the value of your put options dynamically.
Types of Put Options
There are naked puts, which means you don't own the underlying stock, and covered puts where you actually own the underlying shares. Each type of put option varies in risk based on the quality of the underlying shares, the strike price which the options are held, and the options expiration date.
Put options degrade in value over time as the puts reach expiration, so it's best to buy long put options at least 3 months in advance to avoid quick losses. As the expiration date nears, the value of your put options depreciates fast.
Making Money from Overvalued Stocks with Puts
Put options is how corporate executives and hedge fund managers make so much money when stocks dive in value. They bet big on the puts, in hope that the stock price will fall. You make the most money on puts when the underlying stock is grossly overvalued, allowing you to profit from a selloff.
more info : optionstutorial.optionsebook.com
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