Exercising Stock Options, Part 4
Friday, February 8th, 2008One of two things needs to happen in this situation. Either the stock’s current market value needs to rise quickly so that your call premium will be greater than the 5 you paid, or the stock’s market value has to rise enough points by expiration to offset time value (3 points) plus grow beyond the intrinsic value level.
This shows how option buyers need to evaluate risk. In the example, time value represents three-fifths of the total premium. If expiration comes up quickly, the stock will need to increase significantly in a short period of time to produce a profit. In thinking about whether it makes sense to buy such a call, consider these alternatives, especially if you believe that the stock will rise in value:
Learning How To Trade
Monday, February 4th, 2008Do you want to learn how to trade profitably?
If you’re considering trading as a means of making money, or if the idea of Trading for a Living appeals to you, there are some things that you might want to consider before starting.
The idea of trading for a living is very appealing. The fact that you have no one to report to, you can work from home, there is the potential of unlimited profits, and the dream of becoming a millionaire makes trading a very attractive business.
7 Things to Know Before Trading
Balancing Risk And Return
Sunday, February 3rd, 2008Balancing Risk and Return.
Your investment decisions need to take into account several factors.
Your investment objectives risk and return preferences and the time frame involved.
Generally a higher return is subject to a higher risk. Accordingly a low risk portfolio invariably means lower returns.
Below we shall discuss different risks in more detail.
1. Market Risk.
The factors involved here are economic, technological, political or environmental issues. All of these can and will impact on the returns on the investment in the market.
2. Interest Rate Risk.
Invest In Stock
Friday, February 1st, 2008How To Invest In Stocks - Few Tips To Be A Winner
Nowadays, it is really hard to go to a book
Exercising Stock Options, Part 4
Friday, February 1st, 2008One of two things needs to happen in this situation. Either the stock’s current market value needs to rise quickly so that your call premium will be greater than the 5 you paid, or the stock’s market value has to rise enough points by expiration to offset time value (3 points) plus grow beyond the intrinsic value level.
This shows how option buyers need to evaluate risk. In the example, time value represents three-fifths of the total premium. If expiration comes up quickly, the stock will need to increase significantly in a short period of time to produce a profit. In thinking about whether it makes sense to buy such a call, consider these alternatives, especially if you believe that the stock will rise in value:
Stock Market Strategies For Investors
Wednesday, January 30th, 2008Do you wish to earn some good profit from the stock market? Have you ever pondered why some people become millionaires by stock trading whereas some others have to struggle in it?
The difference between the successful and the unsuccessful in stock market lies in the strategy they employ. Employing a well-educated and deliberate strategy would help you gain from the stock trade, whereas giving in to greed and haste would expose you to the risk of loss. Following are some strategies that you can use to turn the trade your way:
Prevent Trading From Turning Into Gambling
Tuesday, January 29th, 2008A common view of trading is that it’s the same as gambling.
While gambling itself can be harmless when done is small doses and for harmless excitement, it becomes a problem when it’s an addiction, and causes grievous harm to a person and/or other people involved.
As a result, gambling has negative social connotations.
The actual definition of gambling is:
“Betting or staking of something of value on the outcome of a game or event.”
Trading in essence is betting or staking something of value on the outcome of a trade, but the difference is that we can take trades that place the probability of winning in our favor.
Balancing Risk And Return
Tuesday, January 29th, 2008Balancing Risk and Return.
Your investment decisions need to take into account several factors.
Your investment objectives risk and return preferences and the time frame involved.
Generally a higher return is subject to a higher risk. Accordingly a low risk portfolio invariably means lower returns.
Below we shall discuss different risks in more detail.
1. Market Risk.
The factors involved here are economic, technological, political or environmental issues. All of these can and will impact on the returns on the investment in the market.
2. Interest Rate Risk.
So You Have Made Some Money On The Stock Market
Sunday, January 27th, 2008So you have made some money on the Stock Market so what have you decided to do with it?
There are countless articles on “How to Make Money” but not too many on what to do wih it once you have made it. Let’s look at a few options.
1. You can spend it.
This is of course after you have allowed for capital gains tax or offset against a past loss.
2. You can save it.
3. You can give it to me. Which personally is a great option I am in favor of.(Joking of course.)
Stock Market Strategies For Investors
Saturday, January 26th, 2008Do you wish to earn some good profit from the stock market? Have you ever pondered why some people become millionaires by stock trading whereas some others have to struggle in it?
The difference between the successful and the unsuccessful in stock market lies in the strategy they employ. Employing a well-educated and deliberate strategy would help you gain from the stock trade, whereas giving in to greed and haste would expose you to the risk of loss. Following are some strategies that you can use to turn the trade your way:
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