I'm beginner contained by investing and I want to know if it is at all possible to build money from trading options. It looks moderately complicated but my broker told me options can provide unlimited return near limited risks. Any of you made any money from option? Any sites or books you recommend?
Answers: Yes, you can make money surrounded by short (1-3 days) and long term (3 weeks). This is depend on your strategy. I generate some money by my self. Study first, use virtual money before you start to trade material money
The way that option work is that they are bought or sold as contracts. A option is the right not the prerequisite to purchase or sell the stock. So surrounded by turn, you are limiting the potential loss.
However, they can expire worthless. Once they expire you lose your total investment. The upside is that you are buying the actual position for pennies on the dollar.
Your broker shouldn't even be telling you roughly options, because they are consider extremely risky, and are not for the average investor.
I used to do option all the time, and undesirably mistimed one a long time ago. I was nearly 3 months early, and lost approx. 15,000. But, if I would own timed it correctly, I would have profited nearly 2.7 million. Needless to say, I want I had that 15k right very soon.
Yes there are oodles strategies to use to make money next to options that can spawn money in up, down and sideways market. However, most are unsuited for beginning investors. The singular exception is covered calls. Writing call on stocks you own increases your returns with pretty much no risk.
Besides that, I would suggest you start studying stocks since their prices and volatilities determine the price of option. A true options trader must also know the Black-Scholes formula for option pricing. There are lots books on the subject.
Yes, you can make thousands of dollars beside stock options. However, option could be risky if you don't know the risk management strategies. A few sites I recommend:
http://www.ibankinsider.com - option trading guide from an ex investment banker
http://www.optionsxpress.com/ - an online broker that provides free investor coaching
http://www.cboe.com/ - Chicago Board of Options Exchange, free basic courses on option
I would also recommend you to read the options playbook by Brian Overby and TradeKing.
Here is newly a little bit of insight for you.
On June 9th 2008 I purchased a give the name option on a company call Solarfun, this is how the trade worked out for me.
Bought the July 08 Expiration $22.50 strike price for $160.00
Sold the position back to the open market on June 16th, yesterday at $220.00 for a profit of $60.00
$220.00 Sell Price
-160.00 Buy Price
_______
$ 60.00 Profit
Total amount of time invested in the position, one week.
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Answers: Yes, you can make money surrounded by short (1-3 days) and long term (3 weeks). This is depend on your strategy. I generate some money by my self. Study first, use virtual money before you start to trade material money
Can I be assigned if I "Sell to close" my way out contract?
The way that option work is that they are bought or sold as contracts. A option is the right not the prerequisite to purchase or sell the stock. So surrounded by turn, you are limiting the potential loss.
However, they can expire worthless. Once they expire you lose your total investment. The upside is that you are buying the actual position for pennies on the dollar.
Your broker shouldn't even be telling you roughly options, because they are consider extremely risky, and are not for the average investor.
I used to do option all the time, and undesirably mistimed one a long time ago. I was nearly 3 months early, and lost approx. 15,000. But, if I would own timed it correctly, I would have profited nearly 2.7 million. Needless to say, I want I had that 15k right very soon.
Yes there are oodles strategies to use to make money next to options that can spawn money in up, down and sideways market. However, most are unsuited for beginning investors. The singular exception is covered calls. Writing call on stocks you own increases your returns with pretty much no risk.
Besides that, I would suggest you start studying stocks since their prices and volatilities determine the price of option. A true options trader must also know the Black-Scholes formula for option pricing. There are lots books on the subject.
Im 15 and I want to fire up research roughly speaking stocks?
Yes, you can make thousands of dollars beside stock options. However, option could be risky if you don't know the risk management strategies. A few sites I recommend:
http://www.ibankinsider.com - option trading guide from an ex investment banker
http://www.optionsxpress.com/ - an online broker that provides free investor coaching
http://www.cboe.com/ - Chicago Board of Options Exchange, free basic courses on option
I would also recommend you to read the options playbook by Brian Overby and TradeKing.
Is StockPickKing.com a biddable stock website?
Here is newly a little bit of insight for you.
On June 9th 2008 I purchased a give the name option on a company call Solarfun, this is how the trade worked out for me.
Bought the July 08 Expiration $22.50 strike price for $160.00
Sold the position back to the open market on June 16th, yesterday at $220.00 for a profit of $60.00
$220.00 Sell Price
-160.00 Buy Price
_______
$ 60.00 Profit
Total amount of time invested in the position, one week.
Resolved Questions: