Options can be the key to your investment philosophy

Options can be the key to your investment philosophy  

Weekly options have allowed traders to make shorter term bets on the market more now than ever.  Since options lose value due to time decay options can allow an investor to control stock for a fraction of its price and if the price appreciates slightly in value then a trader can make a significant return in a shorter period of time.  Traders know that they can make profit using call options as a stock goes up and put options as an investment moves down in price.  One should be mindful of implied volatility of options as traders should not buy options with high implied volatility.  These options can be sold with protection as options allow traders to combine them in various ways to control risk.  Remember to always be concerned in risk and to have appropriate money management
for your own financial situation

Balance of Short and Long Positions

A trader’s worst fear is to secure employment as most traders who trade for a living will focus on managing risk first before ever thinking of garnering a profit.  The financial markets represent great financial rewards but also have real risk. However, if a trader understands this and trades according to their account size while maximizing profitable trades and cutting losing trades which can occur about 20% of the time.  A trader’s main problem to achieve consistent gains is fear which can be overcome with experience, trading with discipline, and developing a sound trading plan.

Commodity Power Trends

As the market has continued it surge in october it has lifted all markets in general and has had a positive impact in the oil markets which has seen a rise in multi-dollar moves over the last few weeks.  A true intraday trader will profit in both long and short irrespective of the overall direction of the market but will have a bias in mind over a weekly or biweekly period.  Remember 1 contract of CL requires between 2-5k in a brokerage account depending on who you use.  If one is able to make a dollar in a given day that could amount to a 20% return if one uses the higher deposit amount.

Analyzing long term trends

We encourage our investors to trade short term as predictions are easier, risk lower, and amount of time in investment is decreased;however,  for those of you who are want to be less involved in the market one can trade long term. We analyzed several stocks in 2008/2009 which have moved sharply from their current levels a few years ago. These two stocks were aapl and bidu which have had strong earnings over the last several quarters which have propelled them to higher highs.  The basis for our short term and long term trades is to find fundamental bullish stocks and then a trader will  fear the downside much less if he or she is initially wrong on entry. One can always hedge a position in the interim if they believe in their original conviction.