Using "thinkorswim" For Option Trading Beats Stock Trading Course
No stock trading course could prepare the stock trader for the extremely volatile market we have experienced in the last year. Large stocks were pummeled by the erratic up and down motions of the market indices 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.
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.
Call options are often referred to as 'surrogates' for stocks because you can benefit from the upward movement of a stock at a fraction of the price. However, the often overlooked profit player is a put option, which is also based on an underlying stock and increases in value when that stock goes down. You can also trade put options for the value they carry inherently, but they also afford you the right, but not the obligation, to sell a stock at a set price. That means you can sell a low-valued stock at a premium price.
In addition, put options can act as a kind of insurance to protect any stock that you do have. Let's say you have 100 shares of stock XYZ, which is trading at $10. If you purchase 1 put option contract at the $10 level, that means is if XYZ drops down to $5, your put options will afford you the opportunity to sell the stock for $10 a" even though it's trading for half of that.
While the most basic tenet of a stock trading course will tell you to 'buy low and sell high', day-to-day stock trading has lost any sort of rhyme or reason and there are few, if any, fundamental reasons for the huge intraday swings we are seeing. The fortunate thing is that this kind of frenetic atmosphere is when stock option strategies profit most.
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.
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.
Call options are often referred to as 'surrogates' for stocks because you can benefit from the upward movement of a stock at a fraction of the price. However, the often overlooked profit player is a put option, which is also based on an underlying stock and increases in value when that stock goes down. You can also trade put options for the value they carry inherently, but they also afford you the right, but not the obligation, to sell a stock at a set price. That means you can sell a low-valued stock at a premium price.
In addition, put options can act as a kind of insurance to protect any stock that you do have. Let's say you have 100 shares of stock XYZ, which is trading at $10. If you purchase 1 put option contract at the $10 level, that means is if XYZ drops down to $5, your put options will afford you the opportunity to sell the stock for $10 a" even though it's trading for half of that.
While the most basic tenet of a stock trading course will tell you to 'buy low and sell high', day-to-day stock trading has lost any sort of rhyme or reason and there are few, if any, fundamental reasons for the huge intraday swings we are seeing. The fortunate thing is that this kind of frenetic atmosphere is when stock option strategies profit most.
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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3:55 PM
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