Stocks have been on a kind of wild ride for the past year, with volatility that no stock trading course could have prepared investors for. The up-and-down, whipsaw motion of the major indices has meant that good stocks have been hurt and bad stocks have been devastated.
Unlike the best stock trading courses, a stock option course will show you how to benefit from the down turns in the markets. You read that correctly- with the knowledge gained from taking an options trading course you can benefit when the market looses.
Using the two basic stock option methods will allow the options trader to benefit more with less risk of capital than the stock trader is able. The call options are the easiest to understand. To put it simply, the value of the call option goes up as the value of the stock goes up.
At their core, call options are coupons that give you the right, but not the obligation, to buy a stock at a certain price for a limited amount of time. In this way, you can trade call options for their inherent value, or you can buy them as a way to purchase your favorite stocks at a relative discount.
Because call options can allow you to make more money with less invested, they are sometimes called "surrogates." The put option is not utilized as much as the call options because it is hard for the trader to understand that the value of a put option increases when the stock price decreases. Contrary to the call options, you can use the put options to sell a stock at a specified price within a time frame or you can trade the put contract itself. What this means is that the trader can sell a lower priced stock at a higher price by using put options.
Put options are also a form of insurance for stocks that you own. For example, suppose you have 100 shares of ABC that cost $10 each. If you purchase a single $10 put option for those 100 shares and the price of the stock drops to $5 per share, then the put option will provide you the right to sell the $5 stock at $10 per share.
The stock trading mantra of 'buy low and sell high' has been around for years, the recent volatility of the stocks on a daily basis is not supported by any of the fundamental rules that supported the buying low and selling high of stocks. These erratic swings in share prices, however, give the options trader a terrific opportunity to profit greatly.
With even the most basic brokerage account, online option trading can generate a windfall of profits whether the market swings up, down or all around by allowing you to trade call and put options. What's more is that options are available for all of the major indices and many exchange-traded funds, or ETFs, as well. This means you can play an entire sector or index for a lot less money. Don't be limited by the strategies in your stock trading course a" expand your portfolio to options and expand your opportunities! - 16036
Unlike the best stock trading courses, a stock option course will show you how to benefit from the down turns in the markets. You read that correctly- with the knowledge gained from taking an options trading course you can benefit when the market looses.
Using the two basic stock option methods will allow the options trader to benefit more with less risk of capital than the stock trader is able. The call options are the easiest to understand. To put it simply, the value of the call option goes up as the value of the stock goes up.
At their core, call options are coupons that give you the right, but not the obligation, to buy a stock at a certain price for a limited amount of time. In this way, you can trade call options for their inherent value, or you can buy them as a way to purchase your favorite stocks at a relative discount.
Because call options can allow you to make more money with less invested, they are sometimes called "surrogates." The put option is not utilized as much as the call options because it is hard for the trader to understand that the value of a put option increases when the stock price decreases. Contrary to the call options, you can use the put options to sell a stock at a specified price within a time frame or you can trade the put contract itself. What this means is that the trader can sell a lower priced stock at a higher price by using put options.
Put options are also a form of insurance for stocks that you own. For example, suppose you have 100 shares of ABC that cost $10 each. If you purchase a single $10 put option for those 100 shares and the price of the stock drops to $5 per share, then the put option will provide you the right to sell the $5 stock at $10 per share.
The stock trading mantra of 'buy low and sell high' has been around for years, the recent volatility of the stocks on a daily basis is not supported by any of the fundamental rules that supported the buying low and selling high of stocks. These erratic swings in share prices, however, give the options trader a terrific opportunity to profit greatly.
With even the most basic brokerage account, online option trading can generate a windfall of profits whether the market swings up, down or all around by allowing you to trade call and put options. What's more is that options are available for all of the major indices and many exchange-traded funds, or ETFs, as well. This means you can play an entire sector or index for a lot less money. Don't be limited by the strategies in your stock trading course a" expand your portfolio to options and expand your opportunities! - 16036
About the Author:
TheScienceOfTrading.com provides 90 free minutes of videos on option trading systems and provides a complete and detailed learning to day trade for beginners to experts.
