The recent stock market crisis (2008) took the stock market down by more than 30% in less than a year. This has a lot of traders thinking that big money can be made simply by buying put options on stocks that will move down with the market, especially high beta ones. Nothing can be further [...]
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Letâs be clear on this. There is no other option trading strategy that can outshine or even equal the profit generating potential of the sport of writing naked options. The term âsportâ is used here because those who practice this money making trading technique not only turn out fabulous profits but also have fun [...]
Option sellers believe that if it’s not, it’s probably the closest an investor will ever get to the long sought Holy Grail of Investments or what is considered to be the ideal investment.
Let’s take a look and see what exactly is regarded as the ideal investment.
When asked to define what the ideal investment [...]
Here we will help you get a handle on what stock options are and how they work. The game of buying and selling stock options began in 1973, when contracts were standardized and started trading on the Chicago Board Options Exchange (CBOE). Let me walk you through my first options transaction in the summer [...]
In the stock market industry, the trade for stocks and stock options are often interchanged and some investors may be confused between the concepts behind these types of trades. First off, you should know is that these two animals have very different characteristics from each other, and using them interchangeably can be lethal if you [...]
Stock options are rights that a stockholder is entitled to as far as his investment is concerned. The rights give him a choice to sell or buy some particular securities underlying that stock at a given price on a given date if he so wishes. However, let it be noted that, there is quite a [...]
Professional traders use the term “lean” to refer to one’s perception about the directional strength of the stock. When you own a stock and intend to hold it for a period of time, you are aware that you will probably be holding it while it goes up and while it goes down.
This means that at [...]
I bought DNDN shares last month at about $4.00 and less than a month later, I sold it for $21. Yes, that’s 425% profit in less than a month. Was that pure luck? How often has that happened to you? What if I told you that luck has nothing to do with this and that [...]
Call and What?
An option is a “legal financial contract”. The holder has the right, but is under no obligation, to accrue or sell a predetermined number of stock shares. This is to be done at a price that has been predetermined which is called a strike price. It is also to be [...]