Option Trading Tips - Why Would Anyone Trade Options?

Written by James Thomas

Beyond allrepparttar 'hype' what is it that makes option trading so good?

This is a question that I wish more people would ask, butrepparttar 150407 thing is not too many people know they even exist!

The main reason that I love option trading is that options providerepparttar 150408 opportunity to turn a small or modest amount of money into a large amount of money quickly!

How is this possible you might ask?

Well before I get intorepparttar 150409 'how' that let me show you exactly 'what' options are.

Options are simply 'contracts' that giverepparttar 150410 buyerrepparttar 150411 right or choice (but notrepparttar 150412 obligation) to buy or sell shares in a particular company, at an agreed price, on or before a set date.

Nowrepparttar 150413 thing is, as an option trader I am not interested in buying or selling stocks, I am only interested in buying and sellingrepparttar 150414 options on stocks.

I want to buy an option for one price and then onsell it to someone else for a higher price and make a profit beforerepparttar 150415 option expires.

Now whether or not I am able to do this depends on two main things:

1) Whetherrepparttar 150416 underlying stock (the stock thatrepparttar 150417 option is concerned with) goes UP or DOWN in price.


2) The type of option that I have bought.

Now, there are 2 types of options, CALLS and PUTS.

Call options give usrepparttar 150418 right to BUY shares inrepparttar 150419 underlying stock.

PUT options give usrepparttar 150420 right to SELL shares inrepparttar 150421 underlying stock.

As I said before, we are not interested in buying or sellingrepparttar 150422 underlying stock, only in making a profit by buyingrepparttar 150423 options (on a stock) and then onselling those options to someone else for a profit.

However,repparttar 150424 only way we can make a profit is ifrepparttar 150425 option itself increases in value.

So What makes options go up or down in price?

CALL options increase in value whenrepparttar 150426 underlying stock goes UP.

PUT options increase in value whenrepparttar 150427 underlying stock goes DOWN.

This may sound confusing if you are new to option trading, but basically what we want to do is to buy CALL options on a stock when we think it is about to go UP in price or buy PUT options if we thinkrepparttar 150428 stock is about to go DOWN in price.

If we are right andrepparttar 150429 stock moves in our desired direction, UP for CALLS or DOWN for PUTS, we will make money.

Why Asset Management Is Not A Get Rich Quick Scheme

Written by James Printon

When you are considering asset management consider what it takes to learnrepparttar field before you attempt it yourself. What I mean by asset management is more complex than just balancing your check book (although that is part of it).

I mean your entire financial worth, not justrepparttar 150406 money inrepparttar 150407 bank butrepparttar 150408 money that is tied up in your home, stocks, bonds and retirement accounts, everything that you may have or will have.

This is a field for professionals to work in not amateurs. You would not go to your neighbor 'Dave' and have him look at your trick knee (unless he was a doctor) and you would not go to see your in-laws and ask them to diagnose car trouble (unless they are mechanics).

But every day somebody goes to his neighbor or to their in- laws and asks them for financial advice.

Financial advice about things like asset management is a complex field that takes years of study to learn. There are many self-help programs onrepparttar 150409 internet and on TV that encourage you to learn 'a simple easy system' to make millions.

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