To every investor, stock market is a challenge. One wishes to meet these, aiming high profits. Is it possible to stay on the pedestal of profits at all times? Is it possible to beat the market with your every move? The answer is clearly in the negative. Profits and losses are part of this game. [...]
When it comes to option trading, the most important lesson to retain is an understanding of what’s actually being traded. The real commodity in any option trading strategy isn’t the underlying stock itself, and it has little to do directly with phrases such as implied volatility, net debit, net credit, strike price, or expiration date. [...]
To truly get an accurate picture of a comparison between the likelihood of success for two different strategies, we must use a real life example, and compare ‘apples to apples’. We are going to do that here with two strategies: That is, we will compare selling ‘at the money’ Put options (spreads) with buying ‘at [...]
Trading preparation demands you know how you are going to trade the market the next day before it opens. It means that you are mentally prepared to adjust your trading strategies intraday, and even go so far as to reverse trend after the market opens when necessary.Three basic steps to consider are:
First, analyze the [...]
Hey Joe! No matter how hard I try, I still find myself hesitating before a trade. Any comments about that?
There are any number of reasons why a trader hesitates before a trade. The main one is lack of planning. Without a plan, there is no degree of confidence a trade will be successful, it’s [...]
1. Focus on markets, trading vehicles (i.e., equities, futures, options, spreads), strategies, and time frames that are comfortable for you and that suit your personality. The trades you make have to be “yours,” not mine or those of anyone else. Even when you purchase a method or system, it is vital that you study that [...]
Short of having a crystal ball, picking winners when stock option trading is not as hard as many people would have you believe. In the first place, when considering purchasing or selling stock options, you need to conduct extensive research on the underlying stock yourself, or rely on someone else to do it for you [...]
Most people will tell you that day trading stock options is extremely risky and shouldn’t be attempted by new traders. And they are right, to an extent. Trading options can be risky even for professional traders with 20 years experience.
However, trading stock options can be a great way to leverage your investment. For a [...]