Option Trading Tips - Why Would Anyone Trade Options?

Written by James Thomas

Continued from page 1

The concept is really quite simple once you accept that it is possible to make money whetherrepparttar underlying stock moves UP or DOWN.

Now here'srepparttar 150407 thing that makes option trading so appealing.

Options only cost a fraction of what it would cost to buyrepparttar 150408 underlying stock itself and a small move inrepparttar 150409 price ofrepparttar 150410 underlying stock, creates a much larger move inrepparttar 150411 price ofrepparttar 150412 option by 10 times to sometimes 100 times!

Let me give you an example, let's say that GE is trading at $31.00 per share. If we wanted to buy 1000 shares in GE today it would cost us $31,000.

However,repparttar 150413 option to BUY GE (CALL options) for $30 at any time duringrepparttar 150414 next 60 days is only $2.00 per share. If we bought enough options to give us control over 1000 shares in GE it would only cost us $1,500.

Now let's say that GE goes up by $1.00 to $32.00 duringrepparttar 150415 next 3 weeks.

If we had boughtrepparttar 150416 shares in GE we would have have made a $1,000 profit (1000 shares x $1.00 per share) or 3%+ return and if we boughtrepparttar 150417 options on GE we still would have only made $1,000 (1000 shares x $1 per share) however as we would have only invested $2,000 intorepparttar 150418 trade, this would be a return of 50%!

By tradingrepparttar 150419 options instead ofrepparttar 150420 stock it is possible to make far greater returns and atrepparttar 150421 same time risk only a fraction ofrepparttar 150422 capital.

This is called LEVERAGE and this isrepparttar 150423 main advantage to option trading over other wealth creation strategies.

However, just as leverage can work for you it can just easily work against you.

This is why you need a solid trading system that stacksrepparttar 150424 odds of success in your favor on every trade and atrepparttar 150425 same time reduces your risk.

My friend Stephen Cooper, a very experienced and successful option trader (and all round great guy) has an awesome little e-book called, The Online Option Trader Manual and in it you'll find an effective step-by-step system for trading options that he uses to build capital fast.

So if you're interested in learning a proven trading system that is getting results, click here to find out more.

James Thomas is a successful private option trader and has created http://www.option-trading tips.com as an informative, no-nonsense resource full of useful tips and information designed to help option traders and investors to become more profitable.

Why Asset Management Is Not A Get Rich Quick Scheme

Written by James Printon

Continued from page 1

Well this is a flat out lie. If a simple easy system could teach you to handle your money and make millions we would have far more millionaires than we do. In fact only those folks that didn't have a computer would be poor. Don't be taken in byrepparttar advertisements that you get in your e-mail or that you see on late night TV.

Asset management can be learned but you need to pay attention to what you are doing and not give in to easy fads or get rich quick schemes. When you are considering what money you need to send your kids to college, go on that dream vacation or retire torepparttar 150406 Caribbean with you are really considering your future.

Nobody wants anything less for themselves than their dreams. If you put your dreams inrepparttar 150407 hands of professionals you are far more likely to realize them than if you allow Dave from downrepparttar 150408 block to set your goals.

Jame Printon has worked in big companies all his life. A major issue in those companies is asset management. Over a number of years James developed excellent asset management skills, and now shares his experience in a series of useful articles.

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