The options course high profit and low stress trading methods phần 1 doc

[...]... refers to how big the subsequent move will be In order to make a profit, the options trader must be correct in all three of these categories This is the primary reason that many people lose money when trading options They do not accurately understand the three dimensions of an options position The first step in taking your options trading to another level is to understand and comprehend the interrelation... successful options trading It is designed to provide novice and intermediate traders with methods and strategies that will enhance profits and manage risk more effectively The investment world has gone through amazing gyrations since the first edition of The Options Course was released back in 19 98 We have lived through the boom of the Internet along with the subsequent bust— when the dot-com became the dot-bomb... in The Wall Street Journal, Barron’s, Research magazine, CBS MarketWatch, and TheStreet.com He also appears on CNBC, Bloomberg, and CNNfn, as well as numerous radio stations across the country In addition, George Fontanills has written two best-sellers, The Options Course and Trade Options Online, and co-written with his partner, Tom Gentile, two others: The Stock Market Course and The Volatility Course. .. in a company The value of that unit of ownership is based on a number of factors, including the total number of outstanding shares, the value of the equity of the company (what it owns less what it owes), the earnings the company produces now and is expected to produce in the future, as well as investor demand for the shares of the company 16 The Big Picture 17 For example, let’s say you and I form a... be either positive or negative for the price of the stock For example, scores of analysts from brokerage firms follow certain industries and companies They have their own methods for determining the value of a company and its price per share They typically issue earnings estimates and reports to advise their clients Analyst, or Wall Street, expectation will drive the value of the shares before the actual... (the date you are “recorded” as the owner of the shares) of the dividend You can also sell the stock as soon as the next day after the payable date and still receive the dividend A beginner may think this is a profitable way to buy and sell shares: Buy the shares a few days before the record date and sell them on the day after the payable date However, before you run out and open a stock brokerage account... given to options with expiration dates further than nine months away The second rule is in regard to magnitude or volatility Options Trading: A Primer 15 When combining different options together, I want to be a seller of expensive options (high volatility) and a buyer of cheap options (low volatility) The third rule is that I want to make time my friend as opposed to my enemy by purchasing options. .. to buy the asset (your house) from the seller of the option (you), who will have an obligation to deliver the option (sell the house) to the option buyer If you want the right to sell an asset, you can employ the use of a put option A good analogy can be the purchase of auto insurance, which provides the right to sell your car (the asset) to the seller of the put (the insurance company) if the value... have to find ways to reduce the stress commonly associated with trading I reconstructed my trading style after experiencing more stress than I had thought I could ever handle In a typical trading day with the S&P 500 (Standard & Poor’s 500 Index, which represents the 500 largest companies in the United States), I found myself buying close to the high of the day Immediately the market started to tumble... insightful approach to trading has enabled thousands of people to learn how to limit their risks and maximize their trading successes These days, Fontanills is President Emeritus of Global Investment Research Corp and an active options and stock trader George’s reputation as the dean of options trading has led to numerous guest appearances on television and radio shows across the country Most recently, . September 11 , 20 01, was one of the most horrific and unforgettable events in the history of humankind. Unfortunately, too many mothers, daughters, fathers, and 1 ccc_fontanills_intro _1- 4.qxd 12 /17 /04. Adjustments 311 vii ftoc.qxd 12 /27/04 3 :19 AM Page vii CHAPTER 12 Choosing the Right Broker 330 CHAPTER 13 Processing Your Trade 347 CHAPTER 14 Margin and Risk 3 71 CHAPTER 15 A Short Course in Economic. The Options Course and Trade Options Online, and co-written with his part- ner, Tom Gentile, two others: The Stock Market Course and The Volatility Course. These “definitive guides to trading have