When you straddle a stock how much of a percentage move do you normally need to see a profit?
Answers: That question cannot be answered intelligently without more information.
Many, if not most, people who buy straddles do not hold them until expiration, so you cannot simply look at expiration break-even points to get an accurate answer.
Different stocks have different implied volatility, so one stock might have to more a much higher percentage than another to see a profit.
The best time to buy a straddle is when you expect an increase in implied volatility. If the increase in implied volatility is great enough the stock price does not have to change at all for the straddle to show a profit.
Another big factor is the amount of time until expiration. A 5% or 10% change in the price of the stock may have a big impact on the price of a straddle expiring in two days but almost no impact on the price of a straddle expiring in two years.
If the straddle was purchased in anticipation of a scheduled event causing a big more in the price of the underlying, any answer becomes even more meaningless. If you expect the event to have a big impact on the price, probably others share that belief. As a result there is often a big decrease in the implied volatility of the options once the event occurs. This means you would require an even bigger impact on the price to make a profit.
I don't buy a lot of straddles, but even if someone who does answers this question the percent move he requires depends upon which straddles he buy, which may be quite different from the straddles you are (considering) buying.
Is Zecco the online broker polite for a small money investor making a couple trades a month?
I keep seeing Zecco, I be wondering if it would be right for me? I only plan on investing similar to $200 up front and maybe $100 a month and making a handful of trades a month, would they be dutiful for me? I saw they seem to be the cheapest per trade so I figure there be some catch similar to an account care fee or something close to that?Answers: You'll have to look into them further, but I don't reckon they have any other characteristics of fees. You'll have to use a discount broker similar to Zecco because even with one or two trades a month, the trading costs will start to join up after a while if you're paying $7 or $9.99 a trade.
I use mbtrading.com, which only charge $1/trade, and they've worked pretty well brought-up for me.
I recommend you give this free E-book a shot. It's an unforced, fast download and the potential gain from reading it are enormous!
I want to buy stocks online.?
I want to buy stocks online. I don't have a complete lot of money to invest. Maybe a thousand or two. I don't want to pay commission since I'll not be using a broker. What is a legit but cheap company to do this through online?I remember my professor within college saying something roughly a "leak" (?)... Getting in by buying with the sole purpose one share, then adding up to it & avoiding commission. What is that?
Answers: Some basic discount brokerage firms:
E-trade securities
Scottrade
TD-ameritrade
I own accounts in adjectives three. I guess E-trade is best, scottrade is close second.
All have flat commissions within the $8 to $15 range. If you buy a great deal of shares (5000+), then the commissions travel up. Note: a $10 commission represents a 0.5% cut of a $2000 trade. So buy for the long run.
Also, since you are (apparently) young, perchance you want to start an IRA. That way, when you trade the income gains are export tax deferred, plus you have will a disincentive to cancel your money.
No idea of what your professor chitchat about.
Why not to recompense commision? trade through Etrade or others its very cheap at hand, and think of how to formulate money instead of how to save commision
Your professor be talking roughly speaking a DRIP. This article explains them:
http://www.fool.com/DRIPPort/WhatAreDRIP...
Brokers aren't evil and DRIPs don't cover that many investment option.
Scottrade opens accounts for $500 and here are no maintainance fees. You can place market or demarcate orders for $7. If you don't know what I simply said, you are NOT ready to invest contained by the market. You inevitability to do some studying.
The market is above all wild immediately and it's really no place for folks without some fundamental familiarity. Educate yourself. Do an online portfolio just online--no buying--and monitor what happens. http://finance.yahoo.com/
Select My Portfolios.
you are better bad buying mutual fund with the Little money you build up each month,you don't retribution Communion and you diversify into many stocks.try Fidelity Investment 1-8OO-544-6666
or nickname Charles Schwab these are old reliable name,