Simple steps to profit from options trading


If you do not necessarily want to buy any shares, but you want to control, to spend some money. Or it sounds like, what can vzrushytstsa?

Well, if so, welcome option for a quick return or quick losses!

The amount that you spend – it's only a small part of the purchase price, but you can control a large pile of inventory.

If the asset rises or falls, your option will also rise and fall in price. In general, you can expect that options will show greater volatility, and by trading these ups and downs, you will be able to make higher returns, which make investments in shares of place.

A few key points about the options

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Traders with options using this volatility to get superior returns.

You see that you can make money in the fall value acquiring "PUT OPTION", and you can capture the rise in prices when purchasing "CALL OPTION".

Now there are many policy options, but I believe in it, to make it easy – so I know what I'm doing, and you should too!

People who buy the shares, also protect their holdings by using options.

You can see that the idea of ​​using leverage to buy very old. Let's see what we do not want to spend money, but we want to control and give us the possibility to do so.

Parameters can do 2 simple things:

* They give you a "right to buy" and

* They give you a "right to market" in the future and on the future price.

You do not have to buy or sell, but the life of your choice

decreases since the conclusion of the contract. shortly

Option expires. So you have to trade it!

If we are ready, we either carry our version, we sell the option and make a profit from the trade – or we will cancel their commitment, when we write options.

We may also cancel its obligation when we wrote "PUT", returned. Similarly, when we write a "ring", we can buy it back and cancel the obligation to sell the shares.

I found a home study course, you should take a look if you are interested in using the lever force. Just click on and find our special link on the options that are traded on the main video page.

Okay, so if I still have not scared, I am talking about using leverage via options – let's continue.

When viewing the video you will see the% numbers that are shown in the following example demonstrates the difference in share price movement compared to the option prices.

Now let's move on.

If you buy a share of XYZ for $ 37, and the price is increased by 12% to $ 41.50, you use more of your precious money to capture the move than if you bought, say, the option of $ 35 (strike) at a price $ 3.50 per option.

Now each contract in the US represents 100 shares. Therefore, your total cost is $ 350 per contract. In Australia one contract represents 1000 shares.

If your stock will rise in price, it is adab & # 39; etsya on the option price. Options can be very volatile – so you need to watch out for very carefully prices.

Let's just say your stock reaches $ 41.50, now $ 35 option series sells for $ 6.50. This means a rise in prices by 86%.

So what happened:

margin of 12%

variant to 86%

Do you think any trading situation brings you the greatest gains from trade?

You would rather hold the option or share?

If you answered "stock", I would be very worried about you!

option Disadvantages:

1. Volatility – needs close monitoring.

2. You can lose money on the option, if you do not sell them before it's over.

3. life is short of options – usually months.

4. Do you need education in option trading.

The advantages of options:

1. Leverage.

2. Volatility – can make more money per trade.

3. Less money needed than owning stocks.

4. Play the market up or down – flexibility.

If you increase your understanding, you can do anything that makes every other trader – to make money from time to time !!

You can see that the loss of & # 39 are part of the game – not all of your transaction will be successful.

Playing the game with that in mind will help you better deal, as well as to respect the market and control the risk.

We control the risk in the first place, who is trained! I have chosen this link because I think it will help you understand and trade options much better.