Many people enter trading, whether it be stocks, options, commodities or other markets, after having been very successful in their primary occupation. Many of these new traders are perfectionists by nature and driven to be successful. This often leads to a couple of fatal flaws in trading:1) The novice trader stays with a losing trade too long because of a reluctance to admit the original analysis was incorrect. His or her ego and sense of...more
Beginning options traders often are confused about the organization of option chains. This paper covers the basic concepts surrounding which options are available at any given point in time, and how that may affect the options you trade.Equity options always have options available for the current month and the following month. In addition, two more months will be available; but those two months will vary, depending upon which of three option...more
It is common to see web site banners or other advertisements similar to the title of this article, touting the benefits of options trades with probabilities of success of 85-90%. Technically, these trades indeed have a high probability of success, i.e., if you placed a trade with the same parameters every month of the year, you should see about 10 or 11 trades per year be successful and one or two be losers. And the longer you traded in this way, the more likely your results would conform to these averages.The underlying probability calculation assumes that the stock price movements are random events, like throwing dice. Of course, stock price movements are not purely random, but are affected by news, rumors, crowd psychology and many more factors. But it isnt a bad approximation for the reality, especially when averaged over many stocks and over long periods of time.The essence of the problem derives from the old financial adage, theres no free lunch. If you were to establish trades with these probabilities, the returns will be rather small, of the order of 7% to 10%. But the losses would be huge, of the order of 90% to 100%. The bottom line is that the one or two losses each...more
Perhaps the most critical characteristic shared by successful investors and traders is their psychological approach to the market. All forms of financial investments have foundational knowledge that is essential to success in that market. I am not suggesting that you can simply think the right way and trade stocks, commodities or any other market...more
Many people think of options trading as very risky and suitable only for the high rollers. This article briefly surveys how options can be used in conservative financial portfolios to boost the income from your stocks.For the purposes of this article, lets assume we have a stock portfolio of conservative stocks, e.g., IBM, GE, etc. We may be...more
You have probably heard people refer to options as a risky enterprise, akin to gambling. And it is true that options trading can be very risky, especially when engaged in with minimal knowledge and preparation. The average stockbroker or financial planner does not have sufficient options knowledge to guide you in the use of options in your portfolio. But that doesnt mean options cannot play a role in a conservative portfolio of stocks.The majority of todays options trading volume derives from institutional money managers who use options to protect their clients stock portfolios. They are using options as insurance. Options may also be used to boost the income that may be derived from a conservative stock portfolio.Options written on stocks are referred to as equity options and come in two forms: calls and puts. A call option gives the holder of the option the right to buy the underlying stock at the strike price of the option at any time before expiration. A call option is similar to a grocery store coupon for a five pound bag of flour at an attractive price; but the coupon is only good for 30 days and is limited to the purchase of one five pound bag. Similarly, a call option...more
One of the most misunderstood topics in real estate is Seller Financing. This is probably because the topic of seller financing is usually discussed from the perspective of the buyer. And in most cases the buyer is a beginning investor who is...more
Are you looking for a Sales Force Automation Solution (SFA) if yes then read on? Before start looking for a solution it is important to understand the meaning and the utility of the solution. The exercise starts by distinguishing between a Personal...more
If your idea of the perfect holiday is to explore the mysterious pyramids of Egypt and discover its ancient culture, or relax on a white powdery sand beach and dive in amazingly clear waters, then you have to visit Hurghada. The magnificence of the...more
Inbound Call Center Services are used by small or large organizations which offer services and support for selling of product or services. At some point of time a business cannot handle large volume of customer responses (query or request). They then...more
Now, if you have cash lying around, thats even better. Did you lose money in 2008 and 2009 in the stock market? Did you lose money in real estate? And do you still have money left in treasury securities, or CDs, and what are you going to get out of...more
Are you tired of working as a wage slave? Of being expected to carry out orders? Of being assessed by mindless superiors? Would you rather build a business of your own, instead of helping your boss expand his? Then perhaps the time has come for you...more