Want to make money in the stock market?
Posted by HanaDaddy | Posted in Investment Tips and Ideas | Posted on 07/03/2009
Tags: bearish, bullish, call, earning, investment, low risk, naked options spread, options, put, shares, stocks, strategies
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There is plenty of money in the stock market. However, not everyone can get the money from there. Some people may get a lot from the stock market but has lost about a lot of money there. It ‘very indecisive. Sometimes, then, is the loss of money, but after a few days, you can earn a profit and sometimes reversed. So, how should we do to get the money from the bag? Usually, there are two ways to obtain money from the bag, which are investing and trading. The difference between trade and investment is trading involves buying and selling of shares or future option, within a short period of time, and investing is buying shares or future option and hold it for a period rather long, usually one or more years before selling it.
What is the difference between the parties, the future and option? What we do know is that it is much cheaper than the share and future, it is usually ten times lower than the price. So if you have a sum of money that enough for you to buy 100 shares, you can use this sum of money to buy the 1000 option. And the return on investment is almost the same option, and between the parties. Therefore, they earn about ten times if you buy the option, rather than share or future. However, the disadvantage is that if you lose on the trade that you lose as much as tenfold. When the option trade, the amount of money you can make a profit and losing is almost as if you were trading shares. However, we need a lot of money to buy shares than to buy the option. This means that the percentage of profit and loss account for the purchase of an option is much more than parties. The example is like when you buy $ 10 for a unity of action and $ 1 for one unit of option. When the price drops to $ 0.10, the percentage reduction for the purchase of shares is 1%, but the option to purchase, the percentage of loss is 10%. That ’s why the percentage of profit and loss account for the purchase of options is huge compared to buy shares even if the price fluctuates in a small amount.




