Wall Street

You probably realize by now that our trading preference is stock options.

Online Stock Market Trading But you have probably also been told or read that options are risky. Even worse, that you can lose your shirt trading them!

Have you ever wondered why you can't simply move an application from, say, Because moving applications is risky and it doesn't always work.

Stock Investing Course Well, what is the truth?

how to satisfy the incessant demons on Wall Street to support the stock price. Yesterday on Seattle' the UW's campus public radio station, the naive thought Starbucks needed to spend more on social justice, its baristas, etc. etc. All these ideas spend money rather than return profit. All drive down the stock price. That's not Howard's mission today.

Stock Market Game Let's take a look at stock ownership. What can happen if you buy stock?

Portfolio theory considers that a market has a systemic rate of return. This rate is, on average, proportional to the risk involved with the instrument invested in. For example, return on government bonds will be small as the risk is low; corporate bonds are riskier, so returns will be higher. As risk levels grow for any instrument, so does the chance of a big loss. The problem is picking the risky stock that won't crash.

Stock Investing Game The price can go up.

The hotel also has direct access to all buses and subways and is a short train ride to Ground Zero, Carnegie Hall, Chinatown and Wall Street.

Journal Prime Rate Street Wall The price can go down.

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Stock Market News The price can go sideways.

Stock Investing Basics In the first case, you can make money. In the second you lose money.

Stock Investing Software And in the third case you don't directly win or lose but in fact it costs you money in two ways. The direct cost of brokerage and fees. And the indirect cost known as opportunity cost.

Stock Market Trading This is the cost due to lost opportunities. The fact that you aren't able to be involved in other, potentially profitable trades.

Stock Investing For Dummy So if you purchase stock you can only make money if the stock price goes up.

Stock Market Crash Now some of you may be thinking, "But what about shorting?"

Stock Investing Tip Well yes, short selling stock is possible but it is quite a tricky strategy and has almost unlimited risk so it is certainly not an approach we recommend.

Stock Market Chart You see, when you short a stock, you actually sell a stock that you don't own. And your intention is to then buy the stock back at a lower price. The price difference is your profit per share.

Online Stock Investing But can you see what the problem is here?

Stock Market Crash Of Well what happens if the stock price goes up? Particularly if it goes up a lot?

Stock Investing For Beginner As you have sold the stock at a lower price you now have to buy it back at a higher price. And so your loss can be substantial.

Finance Journal Personal So, to summarize, when you trade stock you can really only make money if the price increases.

Stock Market Report Now there is one other aspect to this that I want to address. And this is that owning stock is expensive!

Finance Investing Stock Market If you purchase 100 shares of a $50 stock it will cost you $5000. And if you buy it on margin it is still $2500.

Wall Street Journal Com That is a lot of money to outlay. And, more importantly it is a lot of money to put at risk. Especially seeing that you only have a one in three chance of the stock moving in the right direction.

Stock Market Investing Advice Plus as stocks don't trend all that often you not only need to pick the right direction, you also need to be able to pick the right time.

Street Trader Wall So stock trading is not that easy. And it's expensive.

Indian Stock Market But options provide a great alternative.

Stock Investing Advice For a start you only have to invest about 2% of what the stock was worth and yet you still control the same 100 shares.

Free Journal Street Wall So in the example above, instead of investing $5000, we might only have to outlay $100.

Stock Market Information Plus, if you select the right strategy, you can profit no matter whether the stock price goes up; goes down or even goes sideways!

Penny Stock Investing And finally, your risk is limited. The maximum you can lose is the amount you put into the trade. So in the example above - $100.

Stock Market Stock But the best thing of all is the leverage that options provide.

Stock Market Investing Basics In the above example, if the stock price goes up by $5, the profit on the stock trade would be 10% or on margin, 20%.

Black Hoodies Street Wall But with this increase in stock price the value of the option might increase by 100%. And so the profit on the trade would be 100% - or ten times that of the straight stock trade.

Stock Market Trading Tip So don't just accept the common view that owning stock is safe and trading options is dangerous.
If you understand options and learn how to trade them they can be a great investment vehicle.

Stock Option Investing
About The Author:

Small Cap Stock Investing For your Free Stock Market Trading Mini Course "What the Wall Street Hot Shots won't tell you!" go to: http://www.stockmarketgenie.com

Value Stock Investing David Chandler

www.StockMarketGenie.com



For your FREE Stock Market Trading Mini Course:

Invest Stock Market "What The Wall Street Hot Shots Won't Tell You!" go to: www.StockMarketGenie.com

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