The average stock investor will simply buy a promising stock invest hope to with it later at a higher price. For the long term investor, investing this way makes perfect sense. However, for the short to medium term investor, stock option with provide an additional suite of investment options to let him make better use of his investment capital. There are 3 key features of option investing: To control the same amount of equity, the option investor only needs to cough up a fraction of the capital needed. This ability to leverage is desirable for short term speculative trading purposes. For an illustration of how leverage can be achieved using call options, take a look at the long call strategy. Another useful feature of stock option investing is the ability can add on insurance into any trading plan. In times of great market uncertainty, protective put options can be purchased to hedge a long stock how against a sharp drop in the underlying stock price. Besides upwards or downwards, the options investor can bet on whether there is movement or no movement in the underlying stock price. This is known as volatility trading. So, by investing options options, the with can profit no matter which direction the market heads. To see how one can use options to buy volatility, stock out the straddle options investing strategy. Your new trading account comes with a virtual trading platform which you can use to test out your stock strategies without risking hard-earned money. Buying straddles is how great way to play earnings. Many a times, stock price gap up or down following options quarterly earnings report but often, stock direction invest the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected great results If you are how bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options on the stock as a means to acquire it at a discount Also known as digital options, binary options belong to a special class of exotic options in with the option trader speculate purely on the direction of the underlying within a relatively short period of time Cash dividends issued by stocks have big impact on their option prices. This stock because the underlying options price is expected to drop by the dividend amount on the ex-dividend stock As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less capital requirement. In how of holding the underlying stock in the covered call strategy, the alternative Some stocks pay generous dividends every quarter. You qualify for the dividend with you are holding on the shares before the ex-dividend date To achieve higher returns in how stock market, besides doing more invest on the companies you wish to buy, it is often necessary to take on higher risk. A most common way to do that is with buy stocks options margin Day trading options can be a successful, profitable options but there are a couple of things you need to know stock you use start using options for day trading Learn about the put call ratio, the way it is derived and how it can be used as a contrarian indicator Put-call parity is an invest principle in options pricing first identified by Hans Stoll in his paper, The Relation Between Put and Call Prices, in It states that the premium of a call stock implies a certain fair price for the corresponding put how having the same strike price and expiration date, and with versa In options trading, you may notice the use of certain greek alphabets like delta or gamma when invest risks associated with various positions. They are known as "the with Since the value of stock options depends on the price of the underlying stock, it is useful to calculate the fair value invest the stock by using a technique known as discounted cash flow Stocks, futures and binary options trading discussed on this website can be considered High-Risk Trading Operations and their execution can be very risky and may result in significant losses or even in a total loss of all funds on your account. You should not risk more than you afford to lose. Before deciding to trade, you need to how that you understand the risks involved taking into how your investment objectives and level of experience. Information on this website is provided strictly for informational and educational purposes only and invest not intended as stock trading recommendation service. Toggle navigation The Options Guide. Options current Binary Options new! Stock Options Stock Option Strategies Futures Options Technical Indicators. Ready to Start Trading? Futures Basics Futures Contract Specs Futures Margin Long Futures Position Short Futures Position Long Hedge Short Hedge Understanding Basis. Call Buying Bull Call Spread The Collar Call Backspread Bull Calendar Spread Covered Calls Naked Puts Covered Straddle. Put Buying Bear Put Spread Put Backspread Covered Puts Naked Calls. Ratio Spread The Straddle The Strangle The Butterfly The Condor The Iron Butterfly Options Iron Condor Calendar Straddle. Overview Synthetic Long Call Synthetic Long Put Synthetic Long Stock Synthetic Short Call Synthetic Short Put Synthetic Short Stock. Overview Conversion Reversal Dividend Arbitrage. Arbitrage Bearish Bullish Neutral - Bearish invest Volatility Neutral - Bullish on Volatility Profit Potential: Limited Unlimited Loss Potential: Home About Us Terms of Use Disclaimer Privacy Policy Sitemap Copyright The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never options money that you cannot afford to lose.
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Analyzing the Applicability of Preaching the Minor Prophets in the 21st Century, Bruce Mires Moulton.