|
|
|
|
|
|
|
|
|
|
Stock Options and their AdvantagesStock options give you a better way to trade the market as a short term trader for these reasons. Stock options hold many advantages over just holding a stock. This ranges from higher leverage to managing risk. Below are all the ways options can be a better way to go. 1. Higher Return Options offer a higher return then holding the stock. Even a small move in the stock can give you a huge return in the option world. There have been times when I have over doubled my investment in under a day due to options. That has got to speak to the shear ability of option contracts to make you a killing. 2. Helps Manage your risk Sometimes I feel safer buying an option then I do buying a stock, you want to know why? When you buy a stock you are risking a good amount of money. If you buy a stock for $40 you are risking $40 per share. So if you are wrong and something bad happens you can potentially lose a large amount of money. Of course you can always put a stop on a stock, but it doesn’t necessarily guarantee that you will in fact limit your loss to that amount. Take for Example RCII, you could have bought it at $22 and placed a stop at $21. If you did that you would have assumed $1 was the most you could possible lose on the trade. You would have been disappointed however when it gaped open and opened at $19.51. If you had a stop at $21 you would have been forced to buy it at $19.51 because that is the price it opened at. This would have given you a loss over twice the size that you were expecting. However when you buy an option, you know exactly how much you can lose because it is the price of the option contract. 3. Lets you trade When you buy a stock and it goes against you it is very easy to justify holding onto it and making the trade turn into something it isn’t. When you buy an option you have no choice This little thing can mean a huge difference in your performance in the long term. For more on stock Options Visit http://www.stocks-simplified.com/stock_options.html For some stock Tips Visit http://www.stocks-simplified.com/stock_tips.htmlArticle Tags: Stock Options, Would Have Source: Free Articles from ArticlesFactory.com
ABOUT THE AUTHORWhen I was young I wanted to learn how to trade the stock market. So I traveled around the country listening to professional traders talk about how they are making money in the market. Now I understand how easy it is to make money in the stock market and started a site http://www.stocks-simplified.com to help others learn. 
|
|||||||||||||||||||||||||||||||||||||||||
Partners
|
