Therefore, amount of secured loan must be decided with care. Once inside showroom, almost every vehicle looks good. But one must vote for vehicle that most suits his budget.

The loans process: If you thought there is little to an automobile loan after making decision to take it, then you are wrong. You are still halfway in loans process. The implementation part is still remaining.

The first step in loans process will be finding a suitable lender. Though there is a single lender who offers automobile loan, it is difficult to find lender from crowd of lenders. The various lenders chosen have to pass through various stages of screening to prove that they can provide loan at best of terms. Online search significantly simplifies process of search. No obligation loan quotes offered by lenders too are of great help in search process.

Once lender is selected, negotiations on loans begin. Details of loan like term of repayment, interest charged, actual cost of loan, amount of monthly or quarterly repayments etc. are to be decided in this stage. This is most important step because this will decide how loan fares in long run.

The borrowers are advised to tread cautiously in this stage. The terms and conditions of lenders must be read carefully. Particular attention must be given to clauses which rule out early or premature repayment with a penalty. All queries regarding loan must be immediately clarified to prevent problems from emerging in future.

The days ahead.... Has loans process sucked most of your energy? You can rest now because days ahead are a smoother ride. You finally get resources to purchase vehicle of your choice. Secured automobile loans give borrowers a better bargaining power. Regular repayments to automobile loan can further assure a smoother future. Taking a loan protection can be helpful in full and final settlement of secured automobile loans.

Well it’s all about what happens to option price leading up to expiry. You see while probability of market reaching $63 for example may have been low, there is still risk of option price inflating to unacceptable levels based on smaller movement in market.

The market would have only had to shoot up to $60 or $62 within a short time frame and that $63 call would be showing a significant loss. From there market could well turn around, but you may not be able to afford to hold it that long to find out.

Holding $66 and $68 calls gives room to breathe even when market does not do what we want. If market made it up to $60 for example, we would have had to adjust a trade in $63 calls. The trade with higher strikes would not need that adjustment.

The Right Price

If you have a car to sell, you would have a fair idea of what is too low, what is fair and what is above market. The same goes with options. You have to know what is a good price and what is a bad one.

At time, Crude Oil calls were sold for a good price. Analysis showed volatility to be overvalued and therefore it would be right trade to make.

Pricing is a function of things such as time and volatility. These are factors all option pricing models use. The key is knowing how to interpret these models. Interpretation will tell you what is a good price and what is a bad one.

Effective trade management

In an ideal short option trade, there is no management required. The idea is to see option expire worthless without market ever getting near strike price. Things don’t always work like that however and that is why every trade needs a plan. Generally there are three actions you can take when premium goes against you: •One: stop trade out at a loss and walk away. Of course this requires you to set a stop loss level, preferably before you enter trade. •Two: roll position. This simply means closing existing trade and establishing a new short position with a higher strike price and/or a longer time to expiry. The key here is to decide when you should initiate a roll. It is best to agree on a price in underlying as a trigger. For example: “If market gets to $63, I will roll my $66 calls”. The trigger point can change as time passes since a rally of $5 today will affect options differently than a rally of $5 over next month. Additionally, choice of what to roll to should be subject to same requirements as above (i.e. right options at right price). •Three: establish additional positions to either decrease risk or increase potential return from total trade. One could easily write volumes on different strategies that could be implemented. However there is a simple premise here: if you want to add a position that will stand to cover any existing loss, you will be taking on extra risk. Also if you want to add a position that will hedge any further risk, it will come at a cost. It’s all a balance of risk and reward.

Now it is true you could follow all these principles and still lose money. There is risk in every trade no matter how well planned. However, following above guidelines (as we do at wit Option1 trading recommendations) can help move odds in your favour.