Option Trading - As Risky As The Reputation?…

Options Trading has a reputation for being extremely risky, but this reputation is in large part undeserved. True, option trades are extremely risky - even dangerous if you have no idea what you are doing. However, that is true of all forms of offline or online trading, and trading in options is no exception. While options trading has this reputation among laymen, it is often considered to be a form of risk limitation with professional traders. After all, in what other form of investment can you... Read more »

What Causes Stock Prices To Go Up And Down?

One of the hardest concepts for beginners to understand is how stocks are valued. What is the driving force behind a stock price and what causes some stocks to be so volatile? When you buy a stock, you are buying a part of a company. However, that stock price of that company can go up and down drastically sometimes for almost no reason which in turn means the value of the company is going up and down as well. Lets pretend you bought some shares of the stock Garmin in the last six months. If you... Read more »

Choose the Best Stock Trading Strategy To Boost Your Profits

If you are going to be successful in stock trading, you need to figure out which trading strategy best suits you. This means taking into account your needs and resources, your expectations for return, and your tolerance for risk. Even things like your age should be considered when you are choosing a trading strategy. In this article, we’re going to look at some popular approaches to stock trading that are effective in today’s market. Day Trading - A day trader is someone who buys and... Read more »

Compound Stock Earnings Programs - Caveat Investor

The caller seemed surprised that I had never heard about Compound Stock Earnings Programs, or CSEs. “People are earning three to six percent per month with little or no risk”, she continued, “I’m thinking of attending a seminar”. A wise man once said: “If it sounds too good to be true, it probably is”, but this sure is a creative euphemism for what has to be a rather complicated options strategy. The buyer of a “call” option obtains the right... Read more »

Who Sets a Stock’s Price?

There are many, many factors that affect the price of a share but basically it is determined by how much somebody is willing to pay for it. Perceived Value Just like any other auction, the price is determined by the perceived value of the item being traded. It cannot be calculated or determined by a formula. A good example is that house prices fluctuate on a daily basis even though the actual houses are not physically changing. Biggest Factor - Earnings Probably the biggest factor in determining... Read more »

Stock Exchanges - An Introduction

As a new entrant into the stock market you will keep hearing about the terms NYSE, AMEX and NASDAQ and more of the international ones nowadays like HangSeng or the LSE or even the Luxembourg stock exchange . These are stock exchanges where the exchange of stocks takes place between the buyers and the sellers. In effect these are the actual stock markets but the term stock market is used in a broader term to signify the overall stock holdings, indices, exchanges and everything else related to stocks. New... Read more »

The Dangers of Penny Stocks

There are several reasons why it is dangerous to trade penny stocks. These stocks can seem very attractive to beginners so please read the warnings below. Definition: Penny stocks are defined as stocks with a price per share of less than five dollars (or one dollar in some cases). Many of them trade on the OTC/BB (Over the Counter, Bulletin Board) stock exchanges, where they are sometimes known as Pink Sheet stocks, and they might have symbol extensions like .PK or .OB. Volatility: A typical “blue-chip”... Read more »

Your Stock Trading Rules

One of the hardest things about stock trading is self-discipline. You have a set of rules you use for trading, whether you realize it or not. The hard part is sticking to those rules. For example, you may tell yourself that you will never buy a penny stock. Then one day you get a spam email that is boasting about “the next big thing” in the stock market and you go ahead and buy that penny stock. One day later, you have lost 50% of your investment and you are mad at yourself for violating... Read more »

For Stock, Futures and Forex Traders The Biggest Battle To Succeed Is Within, But Why?

You may have heard the statement before; the biggest battles traders will face are within. If there was an explanation as to what these sorts of battles are it’s more than likely along the lines of overcoming bad habits, emotional issues, biases, beliefs and so on. But why are these so important to master, and why is it so hard to do so? I’ll address why it is so important first, as a lot of traders believe that trading should not be so difficult in that if one set of rules works for... Read more »

Mutual Funds - Index Funds

Mutual funds have been around for a long time - since the early 1970’s they have increased in popularity with each year - billions and billions of dollars are now invested in mutual funds, making them one the most popular investment vehicles. A Popular Option As A Mutual Fund - Index Funds There are different kinds of mutual funds and index fund is one of the most useful types of mutual funds. This variety of fund is highly regarded and many people invest in it, all for good reasons. Index... Read more »