Option Trading Ideas

By: David Baxwell

The flexibility of option trading allows you to make money whether the overall direction of prices is up or down. If you make the right decision, you will make money buying put options when everyone else is complaining that there is no more money left to be made in the stock market.

There isn't any reason to go and start troubling yourself with the fact that so much odd information is out there. But if you don't get the bad information out of your head, your finances will not improve. Don't worry any more about the long hours spent on MACD, regression lines, moving averages, histograms, costly quote feeds (in real time), candlesticks, balance sheets, debt ratios, and so forth.

You can earn an unlimited amount of money with option trading. There are a lot of option trading plans, subscriptions and reports that cost more than $1,100 a year. Even at this cost it could be worth the expense, if it helps you. The trouble is most don't do anything for you. They basically just give you unproven industrial interpretations. Sometimes it could and will work occasionally. Having the appropriate option tutorial and stock option education is very important.

Purchasing options can be a great way to obtain enormous profits. Of course every investment has its advantages and disadvantages, however, unlike other investment alternatives; options cannot reduce your entire investment account. You can only lose the money you put into the option.

The prices of options rise over time. That is why professional traders are always selling them to na¯ve investors out for some quick cash. In essence, options are contracts that allow investors to purchase stock for a specific price on a particular date.

The big difference with options is they have an expiration date. An option which is scheduled to expire in September will expire on the third Friday of September. When you buy equities on margin, you pay interest to the broker on the amount that you borrowed from him to make the purchase. When you transact in options, you need to know the expiration date, the strike price, and the ticker symbol of the stock.