Welcome to Trading Platform Guide
Day Trading Platform Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Understanding Options Trading
from:
Like futures, an option gives you the right, but not the obligation, to buy an underlying stock at a specified price at a predetermined date in the future.
You earn a profit if the stock’s market value rises above the price by which you acquired your contract upon the agreement’s expiry. If the stock’s market value drops, then you lose your premium.
There are two forms of options: the call option and the put option. If you buy a call option, you are expecting your stock price to go up and you would prefer the put option if you expect the opposite, meaning you expect prices of your stock to decline.
You actually earn a profit regardless of whether the price of your stock goes up or down unlike other derivative instruments where you only earn a profit when the price of your stock rises.
Hedging strategies are used if you are not sure whether the price of your stock will rise or go down. In this case, you will opt to buy a Put option on your stock. If the price actually goes down, then you earn a profit, but if it goes up, you merely lose your profit.
It is also important to remember that if you think your stock will go down, it is best to sell your stocks and earn a profit from it and just purchase put options.
Another strategies traders engage in are selling their options before it expires to buy the underlying stock, let their contracts expire or sell their options. Selling options is actually not a problem as there are agencies responsible for buying these options in order to maintain balance in the system.
You might want to join options forums so you’ll have access to valuable tips that you may not otherwise find in trading books. There are also various online options trading sites that offer free tutorials as well as membership in the exchange.
Like most investments, you also need to be updated about the economy and the different business players if you want to buy options on stocks about their company. It is important to have a good gauge of which businesses to look out for and to trade on.
Armed with enough information, you will be ready to expand your money through online options trading.
In conclusion, if you are risk averse but would want to maximize your investments, then online option trading might work best for you. But of course, you have to equip yourself with as much knowledge as you can.
Day Trading Platform Specific links
Day Trading Platform News
India's Stock-Trade Matching Platform to Buoy Volume, Credit Suisse Says - Bloomberg
India's Stock-Trade Matching Platform to Buoy Volume, Credit Suisse Says Bloomberg By Rajhkumar K Shaaw - Mon Sep 06 04:55:40 GMT 2010 India's automated trading platforms to match equity buy and sell orders with the best prices on the two ... |
Qatar Exchange shifts to new platform - Financial Times
 Gulf Times | Qatar Exchange shifts to new platform Financial Times Qatar's stock market carried out a successful first day of trading using the Universal Trading Platform technology of NYSE ... Quote of the day Doha bourse to go global |
New Platform For Cisco Systems, Inc. (NASDAQ:CSCO) - Stock Briefings (blog)
 CNET | New Platform For Cisco Systems, Inc. (NASDAQ:CSCO) Stock Briefings (blog) Cisco Systems Inc. (NASDAQ:CSCO) shares were at 20.26 at the end of the day's trading on 9/1/2010. There's been a -13.1% movement in the stock price over ... Cisco (CSCO) Accelerates Smart Grid Push with Arch Rock Deal - Ticonderoga ... Cisco Systems (NASDAQ:CSCO) New Target |
FACTBOX-Market analyst reaction to Gulf oil platform blaze - Reuters
 The Guardian | FACTBOX-Market analyst reaction to Gulf oil platform blaze Reuters During late August, the Mariner platform, located 90 miles (145 km) south of Louisiana, had been producing 1400 barrels a day of crude oil and 9.2 million ... Oil sheen gone from site of platform fire, Coast Guard says Mariner Energy shares fall after platform blast Second Gulf spill puts moratorium back in question |
Mauritius Futures Trading Delayed on Lack of Market Makers, Benimadhu Says - Bloomberg
Mauritius Futures Trading Delayed on Lack of Market Makers, Benimadhu Says Bloomberg The 38-member SEMDEX Index declined for a fourth day, trading 0.9 percent lower at 1697.41 by 1:07 pm in Port Louis, paring this year's gain to 2.2 percent. ... |