Archive for February, 2009
Welcome again to the 10 keys of how to trade stock options successfully. Previously we have discussed the technicalities of options trading. This week I will start looking at the more esoteric aspects of trading beginning with how to formulate a trading plan.
It is imperative you trade with a plan. No trader has ever successfully prospered without a trading plan or with a plan that they didnt stick to. A sound trading plan includes, but is not limited to, the following items:
1. Money management rules, i.e. acceptable profits and losses per trade, how much capital you will commit to any one trade and to the market at any one time.
It is important you identify what your stop loss margin is (as discussed last week) and even more important you stick to it. Writing this sort of information into your trading plan will help cement it in your mind. More on money management will be covered in week eight.
2. Stock and option identification rules, i.e. how you will decide which stocks to trade options on and which options you will trade.
You should figure out if you like technical analysis, fundamental anlysis or a combination of both. How big will your watch list be? What price range of stocks will you trade? Do you like trading in the money or out of the money options? What Greeks will you consider?
3. Entry and exit rules, i.e. What will make you enter and exit a trade, what length of time will you stay in the trade and how often will you trade.
Entry and exit rules will depend largely on technical analysis, write down the patterns and indicators you will look for. Deciding how often to trade will be a big factor in your success. Most people over trade, if you have a fixed profit target then once you have met it you should stop trading. Attempting to go for that little bit extra can lead to a big loss, all the more difficult to take if you had already met your profit target!
4. Your own strategy rules, i.e. which trading strategies you will use primarily and which strategies suit your risk profile.
Know thyself as the ancient Greek saying goes is critical when formulating a stock options trading plan. You will tend to trade options and you do anything else in life, for example, if you are cautious by nature you will trade cautiously, if you are impatient in everyday life you will trade impatiently. Therefore consider your unique traits and formulate your plan around them.
Once you have practiced trading options you will discover your own style of trading, and from that you will develop a plan that suits you. Once you have your plan, and you know it works, stick to it through thick and thin. That doesnt mean that a plan cant be changed but you must ensure that you give your plan a chance to work and that you dont change it the first time you take a loss.
Once you formulate and implement a good trading plan you will be well on your to trading stock options successfully. Next week we will discuss trading with the overall market and index options.
US Government required disclaimer: Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of the Characteristics and Risks of Standardized Options. Copies of this document may be obtained from your broker, from any exchange on which options are traded or by contacting The Options Clearing Corporation, One North Wacker Dr., Suite 500 Chicago, IL 60606 (1-800-678-4667).
By: Roger Cox
About the Author:
It is imperative you trade with a plan. No trader has ever successfully prospered without a trading plan or with a plan that they didnt stick to. A sound trading plan includes, but is not limited to, the following items:
1. Money management rules, i.e. acceptable profits and losses per trade, how much capital you will commit to any one trade and to the market at any one time.
It is important you identify what your stop loss margin is (as discussed last week) and even more important you stick to it. Writing this sort of information into your trading plan will help cement it in your mind. More on money management will be covered in week eight.
2. Stock and option identification rules, i.e. how you will decide which stocks to trade options on and which options you will trade.
You should figure out if you like technical analysis, fundamental anlysis or a combination of both. How big will your watch list be? What price range of stocks will you trade? Do you like trading in the money or out of the money options? What Greeks will you consider?
3. Entry and exit rules, i.e. What will make you enter and exit a trade, what length of time will you stay in the trade and how often will you trade.
Entry and exit rules will depend largely on technical analysis, write down the patterns and indicators you will look for. Deciding how often to trade will be a big factor in your success. Most people over trade, if you have a fixed profit target then once you have met it you should stop trading. Attempting to go for that little bit extra can lead to a big loss, all the more difficult to take if you had already met your profit target!
4. Your own strategy rules, i.e. which trading strategies you will use primarily and which strategies suit your risk profile.
Know thyself as the ancient Greek saying goes is critical when formulating a stock options trading plan. You will tend to trade options and you do anything else in life, for example, if you are cautious by nature you will trade cautiously, if you are impatient in everyday life you will trade impatiently. Therefore consider your unique traits and formulate your plan around them.
Once you have practiced trading options you will discover your own style of trading, and from that you will develop a plan that suits you. Once you have your plan, and you know it works, stick to it through thick and thin. That doesnt mean that a plan cant be changed but you must ensure that you give your plan a chance to work and that you dont change it the first time you take a loss.
Once you formulate and implement a good trading plan you will be well on your to trading stock options successfully. Next week we will discuss trading with the overall market and index options.
US Government required disclaimer: Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of the Characteristics and Risks of Standardized Options. Copies of this document may be obtained from your broker, from any exchange on which options are traded or by contacting The Options Clearing Corporation, One North Wacker Dr., Suite 500 Chicago, IL 60606 (1-800-678-4667).
By: Roger Cox
About the Author:
Roger Cox is a native of New Zealand and now resides in Los Angeles. Former President of an international freight company he decided corporate life wasn’t for him and starting his own consulting business. Roger has been successful in trading stock options, having practiced and traded for more than 4 years and teaches others about trading at http://www.prosperitywithoptions.com
Doloris Maker
The cover letter sample gold rush has flooded the job market with these over used cover letters. Prospective employers are seeing the same old cover letter coming across their desks from countless applicants. Prospective employers are no longer taking a real close look at these cover letters before sending them to the trash can. Job seekers have spent so much time and energy into putting together their resumes that they leave little time to writing a cover letter. They grab up a sample cover letter that they found on the internet or out of book and use this sample as their cover letter. Little thought and effort is put into creating the cover letter that will accompany the job seeker’s resume. Prospective employers after seeing this same old cover letter countless times are realizing the minimal effort put forth in the creation of the cover letter.
With your competition using the same run-of-the-mill sample cover letter that you are using, you are not setting yourself apart from your competition. To set yourself apart you need to refrain from using the sample cover letters that you are find on the internet or out of a book. Instead you need to write up a cover letter yourself that is fresh and unique from what the competition is using. Take the time to create a cover letter that speaks directly to your prospective employer. Which is something a cover letter sample is not going to be able to do.
Another point that job seekers do not look at when joining in on the cover letter sample gold rush is the source of the cover letter sample. Does the source in which you are getting your cover letter sample known how to effectively write a cover letter? Or are they putting together what looks like a good cover letter for the person that knows nothing about cover letters? Job seekers are sometimes unaware that the cover letter sample that they have grabbed up to use was poorly put together. Sending a cover letter off to a prospective employer that is poorly put together is a sure death for your career.
Also the cover letter gold rush that you may be taking part in will give the impression of laziness to your prospective employer. This is not the first impression that you want a prospective employer to have about you. After all the main reason for the cover letter is to land an interview and the appearance of laziness will not land you a job interview.
So avoid the cover letter sample gold rush and write your own fresh and unique cover letter. Create a cover letter that speaks directly to your prospective employer by first addressing the cover letter to an actual person. This one area will speak volumes to your prospective employer considering the competition may be using a cover letter sample and those samples usually address ‘to whom it may concern’ instead of an actual person. Sample cover letters also start off usually with a generalized line or two about referring to your resume and this again is not going to set you apart from the competition. What you need to do is put together a paragraph yourself that addresses the needs of the prospective employer and your qualifications that will allow you to fill those hiring needs. Also most sample cover letters offer a generalized account of why you like the company in which you are applying for. This generalized account can fit for any company you are applying for and not for one specific company. Prospective employers like to see cover letters that specifically address their company from start to finish. The cover letter samples that you may come across and decided to use may also end the cover letter with a passive voice. Your cover letter is not the time to be passive, instead you need to be assertive and ask out right for an interview. After all the purpose of your cover letter is to get and interview and prospective employers take note of applicants that come across as serious about the position in which they have applied for. Remember when putting your cover letter together that by joining the cover letter sample gold rush, you are condemning you resume to the trash can along with all the other hopeful applicants that joined in the gold rush.
By: Mario Churchill
About the Author:
With your competition using the same run-of-the-mill sample cover letter that you are using, you are not setting yourself apart from your competition. To set yourself apart you need to refrain from using the sample cover letters that you are find on the internet or out of a book. Instead you need to write up a cover letter yourself that is fresh and unique from what the competition is using. Take the time to create a cover letter that speaks directly to your prospective employer. Which is something a cover letter sample is not going to be able to do.
Another point that job seekers do not look at when joining in on the cover letter sample gold rush is the source of the cover letter sample. Does the source in which you are getting your cover letter sample known how to effectively write a cover letter? Or are they putting together what looks like a good cover letter for the person that knows nothing about cover letters? Job seekers are sometimes unaware that the cover letter sample that they have grabbed up to use was poorly put together. Sending a cover letter off to a prospective employer that is poorly put together is a sure death for your career.
Also the cover letter gold rush that you may be taking part in will give the impression of laziness to your prospective employer. This is not the first impression that you want a prospective employer to have about you. After all the main reason for the cover letter is to land an interview and the appearance of laziness will not land you a job interview.
So avoid the cover letter sample gold rush and write your own fresh and unique cover letter. Create a cover letter that speaks directly to your prospective employer by first addressing the cover letter to an actual person. This one area will speak volumes to your prospective employer considering the competition may be using a cover letter sample and those samples usually address ‘to whom it may concern’ instead of an actual person. Sample cover letters also start off usually with a generalized line or two about referring to your resume and this again is not going to set you apart from the competition. What you need to do is put together a paragraph yourself that addresses the needs of the prospective employer and your qualifications that will allow you to fill those hiring needs. Also most sample cover letters offer a generalized account of why you like the company in which you are applying for. This generalized account can fit for any company you are applying for and not for one specific company. Prospective employers like to see cover letters that specifically address their company from start to finish. The cover letter samples that you may come across and decided to use may also end the cover letter with a passive voice. Your cover letter is not the time to be passive, instead you need to be assertive and ask out right for an interview. After all the purpose of your cover letter is to get and interview and prospective employers take note of applicants that come across as serious about the position in which they have applied for. Remember when putting your cover letter together that by joining the cover letter sample gold rush, you are condemning you resume to the trash can along with all the other hopeful applicants that joined in the gold rush.
By: Mario Churchill
About the Author:
Mario Churchill is a freelance author and has written over 200 articles on various subjects. For more information on cover letter sample checkout his recommended websites.
Matt
The 2008 recession and stock market crash is the worst financial and economic crisis since the great depression. By Feb 2009, the Dow has dropped almost 50%, erasing all its gains since 1998. In terms of absolute points, the Dow has dropped over 7000 points, which is more than the entire Dow index before 1998. Without doubt, this stock market crash has rendered many traders and investors helpless in search for profit.
Even though profiting during such market condition is a really tough thing to do, traders and investors still bought stocks in hope of a recovery only to be disappointed again and again leaving a bunch of stocks in deep losses in their account. When money is used this way, what it really does is to rob investors and traders of cash for investing when the real recovery starts.
So, is there a way to place those bets with very little money and limit your losses to negligible amounts if your bet is wrong as it had been so many times in this stock market crash so far? Yes, the answer can be found in stock options trading (http://www.optiontradingpedia.com).
Everyone knows that stock options trading is risky and that you could potentially lose all your money. What everyone failed to recognize is the fact that stock options trading is also a risk limited way of trading for big profits while controlling potential losses to negligible amounts!
Stock options (http://www.optiontradingpedia.com/stock_options.htm) are contracts that allow you to buy a stock at a specific price no matter how high the price of that stock is in the future (Call Options (http://www.optiontradingpedia.com/call_options.htm)) or sell the stock at a specific price no matter how low the price of the stock is in the future (Put Options).
By replacing the buying of the stock with buying its call options, you will be able to control the profits on a stock using just a small amount of money. If the stock goes up, you simply sell the call options for the same profit as you would as if you bought the stocks. If the stock goes down, you lose nothing more than the small amount of money you paid for the call option contract. See where I am going with this? If you had bought only the call options of those stocks that you have bought all of last year, you would have lost only a small fraction of the losses that you would already have incurred through buying the stocks.
Let’s look at an example.
John and Peter have $15000 to invest with each and they both decided to buy shares of Apple Inc, AAPL, after it has dropped to $141 in October 2008, expecting a rebound. Peter decided to buy 100 shares with $14,100 and John decided to play it conservative and bought 1 contract of AAPL’s call options with strike price of $140 which was asking at $10.20 for a total price of $1020. 1 contract of call options allows you to control the profit of 100 shares of the underlying stock. In this case, John totally replaced the buying of 100 shares of AAPL with buying 1 contract of its call options. 2 weeks later, AAPL fell all the way to $85 as the recession deepened. Peter lost over $5600 while John lost only the $1020 that he spent buying the call options.
Assuming both Peter and John were right about AAPL and the stock rallies to $200. Peter would have made $5900 in profit while John would have made the same $5900 less the amount of $1020 that he paid for the call options.
See how buying stock options rather than the stock itself in this volatile condition allow you to make a few bets for a rebound without risking all your money? In the above example, Peter would only be able to make one bet once on AAPL with $15,000 while John would have been able to make those same bets more than 10 times at strategic support levels. Who would have a better chance of winning?
By replacing the purchase of stocks with controlling the same number of shares of that stock through its call options, you would definitely have a better chance of survival in this recessionary market condition. Be warned however, that you fully expect to lose the entire amount of money paid on the call options should the stock continue to go down, which is why you NEVER use all your money in a single trade.
By: Jason Ng
About the Author:
Even though profiting during such market condition is a really tough thing to do, traders and investors still bought stocks in hope of a recovery only to be disappointed again and again leaving a bunch of stocks in deep losses in their account. When money is used this way, what it really does is to rob investors and traders of cash for investing when the real recovery starts.
So, is there a way to place those bets with very little money and limit your losses to negligible amounts if your bet is wrong as it had been so many times in this stock market crash so far? Yes, the answer can be found in stock options trading (http://www.optiontradingpedia.com).
Everyone knows that stock options trading is risky and that you could potentially lose all your money. What everyone failed to recognize is the fact that stock options trading is also a risk limited way of trading for big profits while controlling potential losses to negligible amounts!
Stock options (http://www.optiontradingpedia.com/stock_options.htm) are contracts that allow you to buy a stock at a specific price no matter how high the price of that stock is in the future (Call Options (http://www.optiontradingpedia.com/call_options.htm)) or sell the stock at a specific price no matter how low the price of the stock is in the future (Put Options).
By replacing the buying of the stock with buying its call options, you will be able to control the profits on a stock using just a small amount of money. If the stock goes up, you simply sell the call options for the same profit as you would as if you bought the stocks. If the stock goes down, you lose nothing more than the small amount of money you paid for the call option contract. See where I am going with this? If you had bought only the call options of those stocks that you have bought all of last year, you would have lost only a small fraction of the losses that you would already have incurred through buying the stocks.
Let’s look at an example.
John and Peter have $15000 to invest with each and they both decided to buy shares of Apple Inc, AAPL, after it has dropped to $141 in October 2008, expecting a rebound. Peter decided to buy 100 shares with $14,100 and John decided to play it conservative and bought 1 contract of AAPL’s call options with strike price of $140 which was asking at $10.20 for a total price of $1020. 1 contract of call options allows you to control the profit of 100 shares of the underlying stock. In this case, John totally replaced the buying of 100 shares of AAPL with buying 1 contract of its call options. 2 weeks later, AAPL fell all the way to $85 as the recession deepened. Peter lost over $5600 while John lost only the $1020 that he spent buying the call options.
Assuming both Peter and John were right about AAPL and the stock rallies to $200. Peter would have made $5900 in profit while John would have made the same $5900 less the amount of $1020 that he paid for the call options.
See how buying stock options rather than the stock itself in this volatile condition allow you to make a few bets for a rebound without risking all your money? In the above example, Peter would only be able to make one bet once on AAPL with $15,000 while John would have been able to make those same bets more than 10 times at strategic support levels. Who would have a better chance of winning?
By replacing the purchase of stocks with controlling the same number of shares of that stock through its call options, you would definitely have a better chance of survival in this recessionary market condition. Be warned however, that you fully expect to lose the entire amount of money paid on the call options should the stock continue to go down, which is why you NEVER use all your money in a single trade.
By: Jason Ng
About the Author:
Jason Ng is the Founder and Chief Option Strategist of Masters ‘O’ Equity Asset Management ( MastersoEquity.com ) and author of an Options Trading education site, Optiontradingpedia.com. He is a fund manager specializing in options trading and his revolutionary Star Trading System has helped thousands.
Britta Belleau
Writing Covered Calls is a conservative strategy where you buy a stock that you would like to invest in and then write a call option against that stock.
This is a cash generating strategy that not only offers downside protection that you otherwise wouldn’t enjoy if you just bought the stock, but also gives you the ability to generate a consistent monthly income, for only minutes of your time.
However as with all option trading strategies, there are pitfalls that you will need to avoid if you are to be consistently profitable.
Here are a few tips that may help you write covered calls successfully.
Always check the fundamentals of the underlying stock and make sure that you would be happy to own even if options didn’t exist.
A great resource for viewing fundamental ‘ratings’ for stocks is at http://www.morningstar.com
Don’t enter a Covered Call trade just because the option premium looks attractive. Higher option premiums (10-15% or more) often mean that the stock is more volatile i.e. prone to huge price swings and therefore greater risk.
I personally target the larger, more liquid and stable companies with monthly call option premiums between the 3-6% range.
One of my personal favorites and a stock that I have had considerable success writing covered calls on over the years is Oracle (ORCL).
I’ve also had consistent success with Intel (INTC) and Nokia (NOK). At times the Nasdaq Tracking Unit (QQQQ) is also attractive (a 3% yield is the highest I’ve ever seen it though).
Don’t hold stocks at least 2 days either side of earnings announcements. Much of the time expectations of good and even great earnings are already priced into the stock and should the stock fall short of expectations or even worse disappoint, a virtual bloodbath can follow. I’ve experienced declines of 30-50% in just a few days by holding my covered call stocks over earnings announcements.
Don’t get me wrong, it can also be good time to be a stockholder if the earnings numbers are really great, but I’m a little more conservative and to me it’s just not worth the risk. You can always buy back in afterwards anyway!
Always take a look at stock charts when choosing a stock to write covered calls on. There are 3 general patterns that I look for:
1) A moderate uptrend.
2) A sideways trend.
However the most conservative/safe chart pattern for covered call writing (in my experience) appears after a stock has had a steep sell off and has begun to move sideways for a couple of months.
This is a type of ‘bottoming’ pattern where much of the downside risk has already been ‘sold’ out of the stock.
As covered call writers it’s always important to remember that our risk lies if the stock falls sharply, so we want to do our best to reduce the risk as best we can. This is just one way that I have found to be effective.
If you go to http://www.stockcharts.com and pull up the chart for the QQQQ during the early part of 2003, you’ll see this exact pattern. I successfully wrote covered calls on the QQQQ for about 4 months during this time before I allowed myself to be assigned and moved onto another opportunity.
There you have it. Hopefully these tips help you on your way to consistent profits and monthly cashflow writing covered calls.
Oh, it also goes without saying but I’ll say it anyway, “Don’t put all your eggs in one basket!”
Happy option trading and investing!
By: James Thomas
About the Author:
This is a cash generating strategy that not only offers downside protection that you otherwise wouldn’t enjoy if you just bought the stock, but also gives you the ability to generate a consistent monthly income, for only minutes of your time.
However as with all option trading strategies, there are pitfalls that you will need to avoid if you are to be consistently profitable.
Here are a few tips that may help you write covered calls successfully.
Always check the fundamentals of the underlying stock and make sure that you would be happy to own even if options didn’t exist.
A great resource for viewing fundamental ‘ratings’ for stocks is at http://www.morningstar.com
Don’t enter a Covered Call trade just because the option premium looks attractive. Higher option premiums (10-15% or more) often mean that the stock is more volatile i.e. prone to huge price swings and therefore greater risk.
I personally target the larger, more liquid and stable companies with monthly call option premiums between the 3-6% range.
One of my personal favorites and a stock that I have had considerable success writing covered calls on over the years is Oracle (ORCL).
I’ve also had consistent success with Intel (INTC) and Nokia (NOK). At times the Nasdaq Tracking Unit (QQQQ) is also attractive (a 3% yield is the highest I’ve ever seen it though).
Don’t hold stocks at least 2 days either side of earnings announcements. Much of the time expectations of good and even great earnings are already priced into the stock and should the stock fall short of expectations or even worse disappoint, a virtual bloodbath can follow. I’ve experienced declines of 30-50% in just a few days by holding my covered call stocks over earnings announcements.
Don’t get me wrong, it can also be good time to be a stockholder if the earnings numbers are really great, but I’m a little more conservative and to me it’s just not worth the risk. You can always buy back in afterwards anyway!
Always take a look at stock charts when choosing a stock to write covered calls on. There are 3 general patterns that I look for:
1) A moderate uptrend.
2) A sideways trend.
However the most conservative/safe chart pattern for covered call writing (in my experience) appears after a stock has had a steep sell off and has begun to move sideways for a couple of months.
This is a type of ‘bottoming’ pattern where much of the downside risk has already been ‘sold’ out of the stock.
As covered call writers it’s always important to remember that our risk lies if the stock falls sharply, so we want to do our best to reduce the risk as best we can. This is just one way that I have found to be effective.
If you go to http://www.stockcharts.com and pull up the chart for the QQQQ during the early part of 2003, you’ll see this exact pattern. I successfully wrote covered calls on the QQQQ for about 4 months during this time before I allowed myself to be assigned and moved onto another opportunity.
There you have it. Hopefully these tips help you on your way to consistent profits and monthly cashflow writing covered calls.
Oh, it also goes without saying but I’ll say it anyway, “Don’t put all your eggs in one basket!”
Happy option trading and investing!
By: James Thomas
About the Author:
James Thomas is a successful private option trader and creator of http://www.option-trading-tips.com – an informative resource full of useful option trading tips.
Harley Bramham
Hot Tub Covers and taking care for them
The Basics
Vinyl hot tub covers typically are treated with UV, cold crack, and mildew inhibitors. These treatments help preserve the life of hot tub covers at the same time the cover preserves the life of your spa.
Deterring mold is a very important part in protecting the life of hot tub covers because mold makes them susceptible to wear and horrible smells. There is nothing worse than a smelly hot tub cover.
You can get hot tub covers custom made to your own spa, or just choose from the many options there are available to you. If you live in an area of extreme weather temperatures, you may want to look into purchasing a thicker, more durable cover. But for most people, a typical vinyl hot tub cover will suffice. They are strong enough, and unless you are expecting heavy snow or rainfall, this type of cover will work for you.
Aside from the fact that hot tub covers protect the inner-workings of your hot tub, they also protect it from plant life, mold, insects, and prevent animals and children from falling in. A lot of spa covers have locking mechanisms that add to the protection they provide.
Taking care of your hot tub cover.
You not only want your hot tub cover to protect your spa, you also want to protect the cover from wear. Hot tub covers that are well kept and cleaned regularly will benefit you greatly and will save you money over the long haul. Hot tub covers aren’t difficult to maintain, but if you want them to last, there are some things you should know about how to protect them.
Use a quality UVA/UVB vinyl protectant four or five times a year. Do not use protectants that have petroleum or alcohol in them, which will damage the vinyl on hot tub covers. If you choose to use bromine, use as little as possible and make sure to wipe the surface of the cover down very well. You don’t want gas from the strong chemical to get stuck beneath the underside of the cover, which will make it brittle and wear it out. Make sure to leave your hot tub cover open for a half-hour jet cycle just to clear out the system and make sure no such gases are caught inside the spa.
One thing that destroys hot tub covers (or at least makes them ridiculously heavy) is seepage of water getting into the foam core. The foam core has a plastic covering that you don’t want to get punctured. If it does get punctured, water will begin to seep into the very dry core of the cover and it may mold and will definitely get heavier. To fix the problem of water getting into your hot tub covers core, use clear packaging tape to patch up any holes or tears in the plastic covering. Hot tub covers tend to sag after a few years of use and after water seeps into the inner core, which will happen over time. You can take the inner core out of hot tub covers and flip it over. This should reverse any sagging.Â
If you do this every six months as well as check the inner plastic seal for holes, then you shouldn’t have to look for hot tub covers anymore. Yours will last for years
How to Keep your hot tub cover looking New
Hot tub covers, as well as the actual hot tub you own, can be quite an investment. It is often worth it to spend a little more and get a higher quality cover that will last longer, rather than getting a cheaper one that may start to fray, crack, or become waterlogged sooner.
There are a few things you can do to keep your hot tub cover looking brand ******** new and preserve it so you can use it for a lot longer.
Clean your cover using soap and warm water. Hot tubs create chemical residue that will damage the outer lining of your cover as time goes by. If you keep it clean, say by cleaning it twice a month, you will help preserve it.
If you protect the outer lining of the spa cover, this will help prevent water from getting past it and into the inner lining and the foam core because you will help eliminate cracking. As soon as water gets to foam core of the cover, you are well on your way to needing a new one. This is when things start to go downhill.
Beneath the outer lining, there is generally an inner lining made of plastic that directly surrounds the foam core. Check this lining for rips and tears and also see if there is anything inside there that may cause friction against it and possibly rip it.
Cover your hot tub cover. If you put something–tarps work well–over the entire hot tub, you can help prevent sun damage to your cover. During times when you are away or aren’t using your spa for extended periods of time, consider doing this.
It will help you preserve your investment.
By: Bear Facts
About the Author:
The Basics
Vinyl hot tub covers typically are treated with UV, cold crack, and mildew inhibitors. These treatments help preserve the life of hot tub covers at the same time the cover preserves the life of your spa.
Deterring mold is a very important part in protecting the life of hot tub covers because mold makes them susceptible to wear and horrible smells. There is nothing worse than a smelly hot tub cover.
You can get hot tub covers custom made to your own spa, or just choose from the many options there are available to you. If you live in an area of extreme weather temperatures, you may want to look into purchasing a thicker, more durable cover. But for most people, a typical vinyl hot tub cover will suffice. They are strong enough, and unless you are expecting heavy snow or rainfall, this type of cover will work for you.
Aside from the fact that hot tub covers protect the inner-workings of your hot tub, they also protect it from plant life, mold, insects, and prevent animals and children from falling in. A lot of spa covers have locking mechanisms that add to the protection they provide.
Taking care of your hot tub cover.
You not only want your hot tub cover to protect your spa, you also want to protect the cover from wear. Hot tub covers that are well kept and cleaned regularly will benefit you greatly and will save you money over the long haul. Hot tub covers aren’t difficult to maintain, but if you want them to last, there are some things you should know about how to protect them.
Use a quality UVA/UVB vinyl protectant four or five times a year. Do not use protectants that have petroleum or alcohol in them, which will damage the vinyl on hot tub covers. If you choose to use bromine, use as little as possible and make sure to wipe the surface of the cover down very well. You don’t want gas from the strong chemical to get stuck beneath the underside of the cover, which will make it brittle and wear it out. Make sure to leave your hot tub cover open for a half-hour jet cycle just to clear out the system and make sure no such gases are caught inside the spa.
One thing that destroys hot tub covers (or at least makes them ridiculously heavy) is seepage of water getting into the foam core. The foam core has a plastic covering that you don’t want to get punctured. If it does get punctured, water will begin to seep into the very dry core of the cover and it may mold and will definitely get heavier. To fix the problem of water getting into your hot tub covers core, use clear packaging tape to patch up any holes or tears in the plastic covering. Hot tub covers tend to sag after a few years of use and after water seeps into the inner core, which will happen over time. You can take the inner core out of hot tub covers and flip it over. This should reverse any sagging.Â
If you do this every six months as well as check the inner plastic seal for holes, then you shouldn’t have to look for hot tub covers anymore. Yours will last for years
How to Keep your hot tub cover looking New
Hot tub covers, as well as the actual hot tub you own, can be quite an investment. It is often worth it to spend a little more and get a higher quality cover that will last longer, rather than getting a cheaper one that may start to fray, crack, or become waterlogged sooner.
There are a few things you can do to keep your hot tub cover looking brand ******** new and preserve it so you can use it for a lot longer.
Clean your cover using soap and warm water. Hot tubs create chemical residue that will damage the outer lining of your cover as time goes by. If you keep it clean, say by cleaning it twice a month, you will help preserve it.
If you protect the outer lining of the spa cover, this will help prevent water from getting past it and into the inner lining and the foam core because you will help eliminate cracking. As soon as water gets to foam core of the cover, you are well on your way to needing a new one. This is when things start to go downhill.
Beneath the outer lining, there is generally an inner lining made of plastic that directly surrounds the foam core. Check this lining for rips and tears and also see if there is anything inside there that may cause friction against it and possibly rip it.
Cover your hot tub cover. If you put something–tarps work well–over the entire hot tub, you can help prevent sun damage to your cover. During times when you are away or aren’t using your spa for extended periods of time, consider doing this.
It will help you preserve your investment.
By: Bear Facts
About the Author:
Bear Facts is a monthly newsletter form www.teddybearpools.com a division of Teddy Bear Pools & Spas in Chicopee, MA.
Ralph Belletto
If the stock options you’ve received from your employer are burning a hole in your pocket, it may be time to get a second (or third) opinion before you cash in. Employees often believe they have the inside scoop on when the stock’s market price will top out, and that false sense of confidence can lead you to exercise too soon and regret it later.
Employees with true inside information (specific knowledge about the company that will impact the market price when made public) cannot sell company stock based on that inside information. You don’t want to end up in Sing-Sing, so be careful if you’re privy to important information.
That said, a financial advisor can provide needed guidance about your stock options. The first step is to set goals: What role do the stock options have in your overall financial plan? Paying off your mortgage, funding a child’s education and retirement may be uses for stock options, depending on the rest of your portfolio and the amount of time left to exercise the options.
Become educated about your stock options: the terms of their exercise, tax issues and gain-loss consequences. The two types of options (nonqualified and incentive) have very different tax treatment that could consume a large portion of any profit you gain when you exercise the option and then sell the stock. You should consult a tax advisor about implications of exercising options, based on your specific tax bracket and information.
The value of your stock options lies in more than just the difference between exercise price and market price. The time remaining before the options expire (also referred to as time value or leverage), your concentration in your employer’s stock and tax impact all factor into determining the true value of your stock options.
Stocks, historically, increase in value over time—although there is never a guarantee on that. By waiting to exercise, you may enjoy all the upside potential without any cash investment, and that difference between the exercise price and the market price grows untaxed. Conversely, if the stock price declines while you continue to hold the stock options, their potential value may be reduced to zero.
The exception to the “hold ‘em” rule lies in that stock concentration issue. Your salary already depends on your employer. Having too much of your future also tied to your employer can result in a double whammy if the company runs into trouble—loss of income and loss of potential gains from your stock options. As a rule of thumb, if stock options account for more than 25 percent of your net worth, you may want to consider exercising, selling and diversifying your portfolio. This risk management tactic can provide more value than the additional gains you would see if you held the options for the full period.
The other caveat on holding stock options lies in that important tax issue. Waiting until the last minute to exercise incentive options reduces your control over when gains are taxed.
Don’t confuse widespread with simple. Although a growing number of companies now use stock options as part of their compensation or incentive packages, they remain a complex investment device. You should consult with a financial advisor and a tax professional on how to plan the exercise of your stock options.
By: Robert Valentine
About the Author:
Employees with true inside information (specific knowledge about the company that will impact the market price when made public) cannot sell company stock based on that inside information. You don’t want to end up in Sing-Sing, so be careful if you’re privy to important information.
That said, a financial advisor can provide needed guidance about your stock options. The first step is to set goals: What role do the stock options have in your overall financial plan? Paying off your mortgage, funding a child’s education and retirement may be uses for stock options, depending on the rest of your portfolio and the amount of time left to exercise the options.
Become educated about your stock options: the terms of their exercise, tax issues and gain-loss consequences. The two types of options (nonqualified and incentive) have very different tax treatment that could consume a large portion of any profit you gain when you exercise the option and then sell the stock. You should consult a tax advisor about implications of exercising options, based on your specific tax bracket and information.
The value of your stock options lies in more than just the difference between exercise price and market price. The time remaining before the options expire (also referred to as time value or leverage), your concentration in your employer’s stock and tax impact all factor into determining the true value of your stock options.
Stocks, historically, increase in value over time—although there is never a guarantee on that. By waiting to exercise, you may enjoy all the upside potential without any cash investment, and that difference between the exercise price and the market price grows untaxed. Conversely, if the stock price declines while you continue to hold the stock options, their potential value may be reduced to zero.
The exception to the “hold ‘em” rule lies in that stock concentration issue. Your salary already depends on your employer. Having too much of your future also tied to your employer can result in a double whammy if the company runs into trouble—loss of income and loss of potential gains from your stock options. As a rule of thumb, if stock options account for more than 25 percent of your net worth, you may want to consider exercising, selling and diversifying your portfolio. This risk management tactic can provide more value than the additional gains you would see if you held the options for the full period.
The other caveat on holding stock options lies in that important tax issue. Waiting until the last minute to exercise incentive options reduces your control over when gains are taxed.
Don’t confuse widespread with simple. Although a growing number of companies now use stock options as part of their compensation or incentive packages, they remain a complex investment device. You should consult with a financial advisor and a tax professional on how to plan the exercise of your stock options.
By: Robert Valentine
About the Author:
Robert Valentine is a well-known expert in the matters concerning investors. His popular long term care insurance
articles have been published by several publications throughout the United States. Please visit his website, http://www.themoneyalert.com to view his column.
articles have been published by several publications throughout the United States. Please visit his website, http://www.themoneyalert.com to view his column.
Warren Lucarell
All this talk about going green, a big part of saving the environment is to not create more waste that will just end up clogging our land fills. Follow me on this for a minute… There are 10 million spa owners in the USA, and each one of them uses a typical rigid foam spa cover on their hot tub. For the sake of this demonstration each foam cover is only two inches thick and every spa is eight feet by eight feet. That would mean each spa cover contained about 10.666 cubic feet of foam per spa cover. For the rest of this example we will use 10.5 cubic feet per cover.
If each cover on every spa becomes saturated within two years and needs to be replaced that would mean that we would be adding 52.5 million cubic feet of waste to our landfills in just spa covers every year.
If it takes two and a half covers worth of foam to make up one cubic yard that translates to 4 million cubic yards of waste added to our land fills every two years just in spa covers.
If there are 11 million Cubic yards of stone in the Great Pyramid at Giza, we are adding enough foam to build a duplicate of it to our landfills just from used spa covers every six years conservatively. There are four and a half million cubic yards of concrete in Hoover Dam. We could build a two lane highway of discarded foam filled spa covers from Seattle Washington to Miami Florida every two years.
In case you have not noticed most foam filled spa covers are not two inches thick anymore. If all those old foam covers were four inches thick all these calculations would be double.
But we are just being conservative so we want to stick with two inches thick. If we ripped the covers in half and laid those pieces end to end we could circle the earth at the equator on used spa covers every two years.
Heck with parking lots, in a few years we could pave the entire planet with foam just from saturated foam spa covers from the USA alone.
So what is the solution? Well shop for a better spa cover. There are options available on the internet that your local spa dealer probably does not offer. You do not have to quit using your spa to save us. You just need to get a Spa Cover that does not use foam to insulate. There would be two major advantages to doing so. First the spa cover that did not use rigid foam to insulate would last longer. Since what always fails in the typical spa cover is the foam, either breaking or getting so saturated that you cannot lift it, a spa cover that did not use foam would tend to last longer.
Second, if the new type of spa cover does not use rigid foam it will also be a lot more friendly to the environment when it does come time to discard it. Less trash, less waste, less land fill, not that is what going green is all about.
By: Spa Covers
About the Author:
If each cover on every spa becomes saturated within two years and needs to be replaced that would mean that we would be adding 52.5 million cubic feet of waste to our landfills in just spa covers every year.
If it takes two and a half covers worth of foam to make up one cubic yard that translates to 4 million cubic yards of waste added to our land fills every two years just in spa covers.
If there are 11 million Cubic yards of stone in the Great Pyramid at Giza, we are adding enough foam to build a duplicate of it to our landfills just from used spa covers every six years conservatively. There are four and a half million cubic yards of concrete in Hoover Dam. We could build a two lane highway of discarded foam filled spa covers from Seattle Washington to Miami Florida every two years.
In case you have not noticed most foam filled spa covers are not two inches thick anymore. If all those old foam covers were four inches thick all these calculations would be double.
But we are just being conservative so we want to stick with two inches thick. If we ripped the covers in half and laid those pieces end to end we could circle the earth at the equator on used spa covers every two years.
Heck with parking lots, in a few years we could pave the entire planet with foam just from saturated foam spa covers from the USA alone.
So what is the solution? Well shop for a better spa cover. There are options available on the internet that your local spa dealer probably does not offer. You do not have to quit using your spa to save us. You just need to get a Spa Cover that does not use foam to insulate. There would be two major advantages to doing so. First the spa cover that did not use rigid foam to insulate would last longer. Since what always fails in the typical spa cover is the foam, either breaking or getting so saturated that you cannot lift it, a spa cover that did not use foam would tend to last longer.
Second, if the new type of spa cover does not use rigid foam it will also be a lot more friendly to the environment when it does come time to discard it. Less trash, less waste, less land fill, not that is what going green is all about.
By: Spa Covers
About the Author:
The Author is a business owner with more than twenty years experience. A former Police Sgt, Pilot, Heavy Equipment Operator, Trained Mechanic that has written technical manuals and short stories. An accomplished motorcycle rider he enjoys riding the back roads of Washington on his Harley Davidson, with his wife riding copilot. Please visit SpaCap.com Spa Covers.
Refugio Orea
Okay, now that you’ve found a good stock option trading System you are ready to rumble. You’re ready to start ‘cleaning house’ and making huge returns sending you and yours into a rapid luxurious retirement in little under a year.
Your excitement is understood. And guess what? It’s actually possible because it has been done.
We are assuming that you’ve obtained a really good stock option trading system, a method that uses excellent high probability entries, well placed stop losses and a trailing stop method of maximizing profits Now it is time to talk about the ‘good stuff’, the secrets of money management in options trading, where the real profits are created.
Options trading money management is the heart and soul of making your account grow while preventing unwelcome disasters. Trade with intelligent money management and increase your confidence.
Okay, so let’s say your stock options trading system is actually making you profits. You feel that the system can be trusted and now you are anxious to ‘up the ante’ and start making bigger returns. So what do you do next?
Well first of all, keep trading but just keep your position sizes small, for now. It’s now time to do a little tweaking with your money management of your position sizes. Doing this right could possibly make you hundreds of thousands up through millions of dollars, literally. Doing options trading money management wrong can cause you a lot of misery, pain, and suffering and wipe out your account quickly!
In essence, you want to keep your position sizes (the total amount you have invested into an options trade position) even sized and never more than 10% of your options trading portfolio (on a small account and down to 1% to 2% options position sizes on very large accounts). With options, even if you kept your ‘bet’ size the same, say 20 contracts for each and every trade, you could make a great living off just one stock even if you never increase your position size. But if you wanted to taste a little of that compounded, ‘parabolic’ growth increase your options position size by 20% to 30% max every time you double your account (never increase it to 100%!).
In case you’re reading this and do not have a profitable Stock Option Trading System or stock there are excellent systems available through doing a little reasearch. You can try and figure a system out on your own or you can short cut success by obtaining some one else’s system or service and emulate what they are doing.
Here are some basic trading system approaches that can net out consistent profits: Trade trends. Trade pivot points. Trade swings in the direction of the trend. And that pretty much covers it for successful moneymaking, directional options trading that’s worth your time.
If your profits are bigger than your losses then you have a winning trading system. You don’t necessarily have to win more than you lose. Yes you can actually make money by losing more than you win if your winners are big enough and your losers are small enough.
The issue when trading options is that when you lose you can easily take a 25 to 50% ‘haircut’ or more of your position just by simply stopping out through stock price action. This also goes to show that you will want a system that doesn’t lose too often when trading options – remember that. Plus you’ll want your winners to be able to be really big so trend and pivot point systems can perform the best.
This brings up the issue of making a fortune in options trading without losing your shirt.
There is nothing worse than making a fortune in options trading then quickly giving that fortune back. If you’ve ever done that you can understand why people jumped off bridges and have tall buildings in 1929 during the great stock market crash. It’s a most miserable feeling because you get so high and excited, and happy from your gains and then if you lose that if worse than never having had obtained it in the first place. So promise yourself now that you’ll never put your self in that position and that you’ll aggressively guard your profits at all times.
So that said let’s figure out how to grow a trading account rapidly without losing it.
By: Chris Viscaya
About the Author:
Your excitement is understood. And guess what? It’s actually possible because it has been done.
We are assuming that you’ve obtained a really good stock option trading system, a method that uses excellent high probability entries, well placed stop losses and a trailing stop method of maximizing profits Now it is time to talk about the ‘good stuff’, the secrets of money management in options trading, where the real profits are created.
Options trading money management is the heart and soul of making your account grow while preventing unwelcome disasters. Trade with intelligent money management and increase your confidence.
Okay, so let’s say your stock options trading system is actually making you profits. You feel that the system can be trusted and now you are anxious to ‘up the ante’ and start making bigger returns. So what do you do next?
Well first of all, keep trading but just keep your position sizes small, for now. It’s now time to do a little tweaking with your money management of your position sizes. Doing this right could possibly make you hundreds of thousands up through millions of dollars, literally. Doing options trading money management wrong can cause you a lot of misery, pain, and suffering and wipe out your account quickly!
In essence, you want to keep your position sizes (the total amount you have invested into an options trade position) even sized and never more than 10% of your options trading portfolio (on a small account and down to 1% to 2% options position sizes on very large accounts). With options, even if you kept your ‘bet’ size the same, say 20 contracts for each and every trade, you could make a great living off just one stock even if you never increase your position size. But if you wanted to taste a little of that compounded, ‘parabolic’ growth increase your options position size by 20% to 30% max every time you double your account (never increase it to 100%!).
In case you’re reading this and do not have a profitable Stock Option Trading System or stock there are excellent systems available through doing a little reasearch. You can try and figure a system out on your own or you can short cut success by obtaining some one else’s system or service and emulate what they are doing.
Here are some basic trading system approaches that can net out consistent profits: Trade trends. Trade pivot points. Trade swings in the direction of the trend. And that pretty much covers it for successful moneymaking, directional options trading that’s worth your time.
If your profits are bigger than your losses then you have a winning trading system. You don’t necessarily have to win more than you lose. Yes you can actually make money by losing more than you win if your winners are big enough and your losers are small enough.
The issue when trading options is that when you lose you can easily take a 25 to 50% ‘haircut’ or more of your position just by simply stopping out through stock price action. This also goes to show that you will want a system that doesn’t lose too often when trading options – remember that. Plus you’ll want your winners to be able to be really big so trend and pivot point systems can perform the best.
This brings up the issue of making a fortune in options trading without losing your shirt.
There is nothing worse than making a fortune in options trading then quickly giving that fortune back. If you’ve ever done that you can understand why people jumped off bridges and have tall buildings in 1929 during the great stock market crash. It’s a most miserable feeling because you get so high and excited, and happy from your gains and then if you lose that if worse than never having had obtained it in the first place. So promise yourself now that you’ll never put your self in that position and that you’ll aggressively guard your profits at all times.
So that said let’s figure out how to grow a trading account rapidly without losing it.
By: Chris Viscaya
About the Author:
Chris Viscaya is a head trader at OPIVO
Stock and Options Trading Systems OPIVO Trading specializes in trading a unique pivot point strategy on stocks with options offering a subscription service as well as a home study course.
Rick
Has Mother Nature wrecked your spa cover? If you need a new spa cover because your old foam cover was damaged by the elements, consider something different. The typical rigid foam filled hot tub cover covered with vinyl is doomed to end up heavy or broken no matter how well you treat it.
No matter what you treat it with all vinyl is rated by hours outdoors. Really top quality marine grade vinyl is rated for 1500 hours outdoors. That equates to about one hundred days of sunshine. I know what you are thinking, why would anybody put vinyl on something that is meant to be used outside? But that is not even the most common failure of the typical rigid foam filled spa cover.
What generally happens before the vinyl falls apart is that the foam gets so heavy you can not lift your spa cover by yourself. No matter how it is wrapped and sealed inside the cover, the foam fills with water. What happens is the little air spaces in the foam that are supposed to help the foam insulate your spa get filled up moisture. Here is a tip why the whole foam cover is doomed, if you never put the cover on your spa, it would never get heavy. If you just took a brand new spa cover out and put it on your picnic table instead of your spa, the vinyl would fall apart before the cover got heavy.
Why? Because the hot spa water is way below the bottom of the rigid foam spa cover. Some of that warm spa water turns to steam and rises up. Steam molecules are smaller than water. The steam works its way into the little crevices and spaces in the foam where it condenses back into liquid. If you live in an area that gets snow, the snow will land on the saturated foam and freeze the water inside it.
How? because just as heat rises, cold sinks. When it comes in direct contact with the foam it freezes the moisture. The warm spa water is not in direct contact with the bottom of the spa cover so it is in a loosing battle trying to beat the cold. The steam rises from the water, hits the bottom of the now frozen spa cover, condenses and falls back into the water below working like a radiator to actually cool the water.
You may look out at the snow piled on your frozen spa cover and think you have great insulation. But you would be wrong. Snow sits perfectly on a frozen pond too. It does not mean the pond water is still warm. So why does anybody still sell rigid foam covers? Well two reasons really. First, it has been the standard of the industry for nearly thirty years. When the acrylic spa began to be sold in the states, it needed to be covered with something to keep the debris out and to assist in keeping the water warm. Foam boards covered with vinyl was cheap and since everybody was selling the same thing it was all they needed to offer. Remember definition of insanity is to do the same thing over and over expecting a different outcome.
The second reason is worse in my opinion. Spa dealers know that the cover they are sending you home with will need to be replaced again because it will end up the same as the one you are replacing now. They know that like clockwork every couple years you are going to need to get another cover if you intend on using your spa on a regular basis.
So what are your choices? Thanks to the internet you now have the world at your finger tips. Look on line for a different kind of spa cover. Find a spa cover that is not covered with vinyl that is rated by hours if your spa is outdoors. There are Spa Covers available factory direct that do not use rigid foam that is just going to end up to heavy to lift. If you plan on using your spa for the rest of your life like I do, you owe it to yourself to get a better kind of spa cover.
By: Spa Covers
About the Author:
No matter what you treat it with all vinyl is rated by hours outdoors. Really top quality marine grade vinyl is rated for 1500 hours outdoors. That equates to about one hundred days of sunshine. I know what you are thinking, why would anybody put vinyl on something that is meant to be used outside? But that is not even the most common failure of the typical rigid foam filled spa cover.
What generally happens before the vinyl falls apart is that the foam gets so heavy you can not lift your spa cover by yourself. No matter how it is wrapped and sealed inside the cover, the foam fills with water. What happens is the little air spaces in the foam that are supposed to help the foam insulate your spa get filled up moisture. Here is a tip why the whole foam cover is doomed, if you never put the cover on your spa, it would never get heavy. If you just took a brand new spa cover out and put it on your picnic table instead of your spa, the vinyl would fall apart before the cover got heavy.
Why? Because the hot spa water is way below the bottom of the rigid foam spa cover. Some of that warm spa water turns to steam and rises up. Steam molecules are smaller than water. The steam works its way into the little crevices and spaces in the foam where it condenses back into liquid. If you live in an area that gets snow, the snow will land on the saturated foam and freeze the water inside it.
How? because just as heat rises, cold sinks. When it comes in direct contact with the foam it freezes the moisture. The warm spa water is not in direct contact with the bottom of the spa cover so it is in a loosing battle trying to beat the cold. The steam rises from the water, hits the bottom of the now frozen spa cover, condenses and falls back into the water below working like a radiator to actually cool the water.
You may look out at the snow piled on your frozen spa cover and think you have great insulation. But you would be wrong. Snow sits perfectly on a frozen pond too. It does not mean the pond water is still warm. So why does anybody still sell rigid foam covers? Well two reasons really. First, it has been the standard of the industry for nearly thirty years. When the acrylic spa began to be sold in the states, it needed to be covered with something to keep the debris out and to assist in keeping the water warm. Foam boards covered with vinyl was cheap and since everybody was selling the same thing it was all they needed to offer. Remember definition of insanity is to do the same thing over and over expecting a different outcome.
The second reason is worse in my opinion. Spa dealers know that the cover they are sending you home with will need to be replaced again because it will end up the same as the one you are replacing now. They know that like clockwork every couple years you are going to need to get another cover if you intend on using your spa on a regular basis.
So what are your choices? Thanks to the internet you now have the world at your finger tips. Look on line for a different kind of spa cover. Find a spa cover that is not covered with vinyl that is rated by hours if your spa is outdoors. There are Spa Covers available factory direct that do not use rigid foam that is just going to end up to heavy to lift. If you plan on using your spa for the rest of your life like I do, you owe it to yourself to get a better kind of spa cover.
By: Spa Covers
About the Author:
The Author is a business owner with more than twenty years experience. A former Police Sgt, Pilot, Heavy Equipment Operator, Trained Mechanic that has written technical manuals and short stories. An accomplished motorcycle rider he enjoys riding the back roads of Washington on his Harley Davidson, with his wife riding copilot. Please visit SpaCap.com Spa Covers.
Scottie Frerichs
A lot of traders now favor option stock trading because of its many advantages. For one it can be highly profitable if used rightly, it offers the investor more flexibility and a larger option to diversify. This trading system offers more protection to the portfolio gives more control to the investor and offers a higher possibility to generate more returns on investment. They can be used under any market condition. They offer the investor the advantage of making returns on a change in stock price without actually owning the stock. Options stock trading can be used in combination with other option contracts and/or other financial tools to maximize returns.
Furthermore, a lot of trading is done on the floor of the stock exchange; one of such is referred to as stock option trade. Sometimes the trading could just be more of speculative activity. Speculative activity trading is done on stock exchanges through stock options trading. The term option in stock parlance means “a right”. There exists the right to sell as well as the right to buy. In a deal involving an option, the right to buy or sell a certain amount of securities, within a particular period at a given price can be bought off a dealer. If the purchased right was an option to buy securities it would be called a “call option”. If the right was the option to sell, it is called a “put option”. Instances where the two possible options are combined, to buy or sell a certain quantity of securities at a particular price up to a given future date, it is then referred to as “a double option”, or “a put and call option”
Speculative activity or stock option trade is carried out for anticipated profit. Here is how it works. If a speculator expects the price to go up, he buys a call option. This allows him in future when the price has arisen to buy at the old lesser price and sell at the higher prevailing price. When the reverse happens and a drop in price is anticipated he buys the put option.
When a speculator notices that his predicted or expected rise or fall in price did not occur he can chose not to exercise his right or stock trade option that he had purchased. The party that grants or sells the stock option trade to the speculator is paid a premium for granting it.
This premium is also called the option money. This is the fee that is earned by the trader who grants the speculator the stock option trade. When the speculator desires not to exercise his option he loses the option money or premium. But his loss is restricted to the option money alone. Stock option trade is useful for speculators who want to protect their capital and yet seize advantage of fluctuations in prices. He has the choice to decide whether to exercise his option or not.
By: Wincent Loh
About the Author:
Furthermore, a lot of trading is done on the floor of the stock exchange; one of such is referred to as stock option trade. Sometimes the trading could just be more of speculative activity. Speculative activity trading is done on stock exchanges through stock options trading. The term option in stock parlance means “a right”. There exists the right to sell as well as the right to buy. In a deal involving an option, the right to buy or sell a certain amount of securities, within a particular period at a given price can be bought off a dealer. If the purchased right was an option to buy securities it would be called a “call option”. If the right was the option to sell, it is called a “put option”. Instances where the two possible options are combined, to buy or sell a certain quantity of securities at a particular price up to a given future date, it is then referred to as “a double option”, or “a put and call option”
Speculative activity or stock option trade is carried out for anticipated profit. Here is how it works. If a speculator expects the price to go up, he buys a call option. This allows him in future when the price has arisen to buy at the old lesser price and sell at the higher prevailing price. When the reverse happens and a drop in price is anticipated he buys the put option.
When a speculator notices that his predicted or expected rise or fall in price did not occur he can chose not to exercise his right or stock trade option that he had purchased. The party that grants or sells the stock option trade to the speculator is paid a premium for granting it.
This premium is also called the option money. This is the fee that is earned by the trader who grants the speculator the stock option trade. When the speculator desires not to exercise his option he loses the option money or premium. But his loss is restricted to the option money alone. Stock option trade is useful for speculators who want to protect their capital and yet seize advantage of fluctuations in prices. He has the choice to decide whether to exercise his option or not.
By: Wincent Loh
About the Author:
Find out more about the best options trading courses at options university site.
Jeffrey