Trading Of Options Outperforms Stock Trading Courses
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.
Unlike the best stock trading courses, a stock option course will show you how to benefit from the down turns in the markets. You read that correctly- with the knowledge gained from taking an options trading course you can benefit when the market looses.
Using the two basic stock option methods will allow the options trader to benefit more with less risk of capital than the stock trader is able. The call options are the easiest to understand. To put it simply, the value of the call option goes up as the value of the stock goes up.
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.
You can also use put options as a form of insurance for the stocks you own. For example, if you purchase 100 shares of a $10 stock you spend $1,000. If the price drops to $5 per share then you lost $500. If you purchased a single $10 put option for those same 100 shares and the price fell to $5 per share, then you will have the right to sell the $5 shares for $10 each, thus negating your loss.
The saying 'buy low and sell high' has been around for almost as long as the stock market and this was an effective message when the daily volatility of market was supported by the fundamentals- which has not been the case for the past year. These large daily swings would stress the stock trader but allow the options trader to profit from them.
With even the most basic brokerage account, online option trading can generate a windfall of profits whether the market swings up, down or all around by allowing you to trade call and put options. What's more is that options are available for all of the major indices and many exchange-traded funds, or ETFs, as well. This means you can play an entire sector or index for a lot less money. Don't be limited by the strategies in your stock trading course a" expand your portfolio to options and expand your opportunities!
Unlike the best stock trading courses, a stock option course will show you how to benefit from the down turns in the markets. You read that correctly- with the knowledge gained from taking an options trading course you can benefit when the market looses.
Using the two basic stock option methods will allow the options trader to benefit more with less risk of capital than the stock trader is able. The call options are the easiest to understand. To put it simply, the value of the call option goes up as the value of the stock goes up.
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.
You can also use put options as a form of insurance for the stocks you own. For example, if you purchase 100 shares of a $10 stock you spend $1,000. If the price drops to $5 per share then you lost $500. If you purchased a single $10 put option for those same 100 shares and the price fell to $5 per share, then you will have the right to sell the $5 shares for $10 each, thus negating your loss.
The saying 'buy low and sell high' has been around for almost as long as the stock market and this was an effective message when the daily volatility of market was supported by the fundamentals- which has not been the case for the past year. These large daily swings would stress the stock trader but allow the options trader to profit from them.
With even the most basic brokerage account, online option trading can generate a windfall of profits whether the market swings up, down or all around by allowing you to trade call and put options. What's more is that options are available for all of the major indices and many exchange-traded funds, or ETFs, as well. This means you can play an entire sector or index for a lot less money. Don't be limited by the strategies in your stock trading course a" expand your portfolio to options and expand your opportunities!
About the Author:
TheScienceOfTrading.com provides 90 free minutes of videos on option trading systems and provides a complete and detailed stock trading course for beginners to experts.
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