Stock Options Trading SystemsA good stock options trading systems represents a very nice alternate possibility to trade the market. It requires only a small amount of money and the leverage is very high.
Of course the risk is much higher but using a stock option trading system can be a very rewarding investment style especially if you gain the knowledge or find a good stock option trading service with a high success rate. This way you can turn a few thousands of dollars into a very nice monthly revenue. In this page we will examine what is a stock option trading system and how you can quickly tap into this fascinating trading style. If you are interested in earning regular monthly revenu at no risk see how it is easy with this free service. Stock options trading systems basics Stock Option trading is more complex than trading stocks directly. When we trade an option we have to specify a strike price, an expiration month, which type of option trading you want (CALL or PUT) and on which side your initial position will be. Let's first discuss the strike price. For each stock option we have a strike price at every 2.5 points for stocks between 5$ and 25$ and at every 5 points above that. For example if the IBM stock is at 92 you then have the choice to take 90 or 95 strike price. You could also use 85 or 100 if you want. The difference with each strike price is the premium. If we take our example and you decide to buy an IBM stock option with 90 strike price when the market is at 92 you would pay about $5 depending on how much days remains before the option expires. If you would choose 95 instead your option would cost a bit less for a CALL. Let's now discuss the stock option expiration month. An stock option expires every third Friday of each month. So the maximum time it can last is about 5 weeks. Of course you can choose expiration month much further in the future but your premium will also be much higher. At the beginning the premium is high and declines as we get towards the expiration. This is a very important factor to consider if you choose to use this type of trading tool. It forces you to take a very short term approach instead of a more mid term approach. When an index option expires it is worthless. Let's now discuss the type of stock option you can choose. If you decide to trade the market on the UP side you would pick a CALL. If on the other hand you would want to play the market on the DOWN side you would pick a PUT. So yes you can bet on a market decline to make money if you have the nerves to do so. There are many more complex option stock trading strategies discussed briefly later in this page. Let's now discuss the initial position side. When we initiate a trade with a stock option we can buy an option from someone or we can sell an option to someone. There is a big difference between the two. If you buy an option from someone else your risk is limited to the price you paid, you cannot lose more than that and your profit potential is unlimited. On the other hand if you sell an option to someone else as the opening position your loss potential is unlimited and your profit is limited to the price you received on the transaction. This is what we call a naked PUT. It also takes a bit of margin to initiate a naked PUT (20% of the value of the underlying stock). So if you are betting on the market to go up, you can buy a CALL or sell a PUT. If you want to learn a lot more on several stock options trading strategies as well as all the terms related to stock options trading, we suggest this excellent book
Click Here for this stock options trading systems book!
We will now discuss two different approaches to get yourself involved in stock options trading systems. We will briefly describe three services specialized in that area.
TradingOptionsLab is a fascinating videos series on stock options trading but in a way you have never seen before. You will learn how easy it is to get between 3% and 5% regular monthly revenu using options strategies like Iron Condor, Vertical Spread as well as Calendar Spread. You use those strategies on ETFs like SPY QQQQ EEM DIA and IWM. The best part is the fact that risk is very low. You also learn how to adjust your trade if it is turning against you to get almost full profit. Click here to learn more They also teach very interesting ways to combine stock with options together to lower risks and prepare for high profits on the long term. Also you must see this video on what they call the Victory Spread. You will learn how to expose yourself to big profits on fast moving stocks while you risk no more than 100$ per 100 shares. Click here to learn more Finally they show a surprising day trading method called Delta scalping. It looks a bit complicated up front but take the time to understand it it will blow your mind. This is all affordable at a very low cost.
If you are looking for a very simple to use Option trading service, Slingshot Options service is for you. They provide clear buy and sell signals on 8 specific stocks. They also provide for stops and trailing stops with their trade suggestions. They offer free newsletter and plenty of videos to help traders better understand options trading. You don't need to follow the markets during the day. You place your orders to the market before the market open. So no need to stay in front of the computer. 1,000$ with just one stock can yield 10,000$ in 1 year. There will be a few losses here and there but this service is very reliable and not too expensive. Click here to learn more on Slingshot Options Trading Onlineoption is another interesting stock options trading systems service which is a bit different from the previous ones. This one offers a lot of information on how Dr Cooper makes his trading decisions. He offers books, videos and even forums. He also offers a montly membership where you can receive trade alerts. EACH DAY THE ENTIRE NEW YORK STOCK AND NASDAQ EXCHANGES ARE SCANNED USING A SEVEN-POINT SYSTEM. RESULTS ARE THEN E-MAILED TO YOU EACH TRADING DAY. You can see with the members forums how different members are doing with their trades. You can post your own and then see how profitable you are. With this stock options trading system you are not left alone and can share your experience with other members.
Click here to learn more about Onlineoption services!
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