Options Trading Profits Better Than Stock Courses
There are no stock trading courses that could have prepared a stock trader for the erratic and volatile market we have experienced over the last year. The up and down motions of the market indices exacted a toll on the large stocks and the smaller, weaker stocks were demolished.
An options course will show how to benefit from the downturns in the markets where the stock trading courses cannot. That is right, when stock traders are losing money, you will be able to use your stock options training knowledge to make more money!
Understanding the two most basic options strategies can help you make bigger returns for a lot less capital. First, there are call options, which are securities based on underlying stocks. Call options profit when stocks move up, so they're pretty easy for most traders to understand.
When using a call option, the trader is allowed but not required to purchase the underlying stock at a specified price within a specified time range. The trader also has the option of trading the call contract itself or using it to purchase a favorite stock as a reduced price.
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 saying 'buy low and sell high' has been around for almost as long as the stock market and this was an effective message when the daily volatility of market was supported by the fundamentals- which has not been the case for the past year. These large daily swings would stress the stock trader but allow the options trader to profit from them.
A basic online brokerage account will allow you profit greatly from trading options where the stock trader would not. Options can be traded on the major indices as well as the exchange traded funds (ETFs). This enables you to trade an entire sector or index with less risk to your capital. Take an options trading class today to learn how you too can benefit from options trading where a stock trading class will only limit your profits in today's erratic market.
An options course will show how to benefit from the downturns in the markets where the stock trading courses cannot. That is right, when stock traders are losing money, you will be able to use your stock options training knowledge to make more money!
Understanding the two most basic options strategies can help you make bigger returns for a lot less capital. First, there are call options, which are securities based on underlying stocks. Call options profit when stocks move up, so they're pretty easy for most traders to understand.
When using a call option, the trader is allowed but not required to purchase the underlying stock at a specified price within a specified time range. The trader also has the option of trading the call contract itself or using it to purchase a favorite stock as a reduced price.
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 saying 'buy low and sell high' has been around for almost as long as the stock market and this was an effective message when the daily volatility of market was supported by the fundamentals- which has not been the case for the past year. These large daily swings would stress the stock trader but allow the options trader to profit from them.
A basic online brokerage account will allow you profit greatly from trading options where the stock trader would not. Options can be traded on the major indices as well as the exchange traded funds (ETFs). This enables you to trade an entire sector or index with less risk to your capital. Take an options trading class today to learn how you too can benefit from options trading where a stock trading class will only limit your profits in today's erratic market.
About the Author:
TheScienceOfTrading.com provides 90 free minutes of videos on option trading systems and provides a complete and detailed learning to trade options for beginners to experts.
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