How to trade stocks for people?
Say, i have two-three friends willing to give me their money to trade stocks-options-futures for them. Should i open a corporate trading account for that or i may use my personal account? Where can i read about that? Is there any law/act regulating that kind of activity in US?
In many States, if you charge a fee for the service, you must be licensed.
Just to keep your hands clean,:
You’d best open a separate account for the purpose, and keep
good records of who contributes what and when.
Get letters of agreement specifying what you are going to do, how you
intend to share any profits, and that they are aware of the risks involved.
(You do know that futures & options open you to risks greater than the
amount of your investment right?)
How do I make money in OPTION trading in Stock Market?
How do you trade them or how do you make money? Two different questions. If there’s something you don’t understand about trading options, you should ask a specific question. Your question is too broad, like asking "How do I drive a car?" There’s more to it than just buying one and would take pages to explain, trying to describe the different types when you might not know what a clutch is.
To make money with options you have to trade them in a margin account, like you would trade a stock. It is a very sophisticated trading strategy, highly leveraged, and very risky, not for the average investor.
Selling covered calls is a safe thing to do, but not very profitable because you’ve limited your upside potential, defeating the entre purpose for investing in the first place and doubled the cost of commissions. If the stock goes up really hard, you get it called away and you’re left holding the bag with nothing, instead of a gain.
If you want to be safe, buy a CD.
Which Stock Option Trading Systems Should I Use For My First Trades?
I just learned about iron condors and double calendars but which one should I use since I am just starting out?
To be successful at trading options in the stock market, you’ll need practice. The best way to get practice is through paper trading, that’s where you follow a stock and pretend you are actually putting trades in and then taking them out, hopefully for a profit.
You can also find books on the subject, like on amazon or barnes and noble. You’ll need a good foundation on the basics. There are also different strategies when it comes to trading options so you’ll need to learn those first as well.
For more advanced ways on how to trade options, there are sites that offer guidance. The advantage with these sites is that they will take you beyond the basics and offer you a better chance at higher returns on your trades.
I’ve listed some sites below that you can check out, they are for information purposes only and not a recommendation. However, you will learn a little more than what you can get from reading books.
http://www.stockoptiontradingsystems.com
http://optionsexpress.stockoptiontradingsystems.com
http://tradeking.stockoptiontradingsystems.com
I think if you start your learning this way, you will be able to succeed in trading options. Others have done it so there’s no reason why you can’t learn how to do it too.
Hope that helps and good luck!
Where Can I Find A Good Option Trading Course For Stock Market Options?
I just finsihed reading Trading for Dummies and really want to learn more before I start trading in stock options, is there a course I can take online or something like that?
To be successful at trading options in the stock market, you’ll need practice. The best way to get practice is through paper trading, that’s where you follow a stock and pretend you are actually putting trades in and then taking them out, hopefully for a profit.
You can also find books on the subject, like on amazon or barnes and noble. You’ll need a good foundation on the basics. There are also different strategies when it comes to trading options so you’ll need to learn those first as well.
For more advanced ways on how to trade options, there are sites that offer guidance. The advantage with these sites is that they will take you beyond the basics and offer you a better chance at higher returns on your trades.
I’ve listed some sites below that you can check out, they are for information purposes only and not a recommendation. However, you will learn a little more than what you can get from reading books.
http://www.stockoptiontradingsystems.com
http://optionsexpress.stockoptiontradingsystems.com
http://tradeking.stockoptiontradingsystems.com
I think if you start your learning this way, you will be able to succeed in trading options. Others have done it so there’s no reason why you can’t learn how to do it too.
Hope that helps and good luck!
What Stock Option Trading System Should I Use?
I’ve seen a lot of different option trading info on the net and am really interested in getting into this but not sure which system to use, there’s so many. I would prefer one that doesn’t have too much risk but with lots of profit potential!
Hello,
Learning how to trade stock options is not easy. There are many different types of systems to use and choosing one requires plenty of research.
When I started out, I had to do a lot of research and one of the best ones I found is at the website below ..
http://www.StockOptionsTradingSystem.com
I thought stock options trading was scary at first but when I learned the system this guy uses, I was able to trade with confidence.
How do option trades affect stock prices?
I would guess that only when an option is exercised that the stock price is affected. Is that correct?
Option trades are important to stock prices in several ways, particularly low-volume stocks:
1) If there is a big option trade, it could be an indication that the "smart money" knows something. For example, the SEC is investigating some March BSC puts at $2.5 that were bought while BSC was in the 50s two weeks ago
2) I’ve found that for low-volume stocks, stock prices often "stick" near option strike prices near expiration. For example, if the strike prices are $20, $25, $30, then the stock would be more likely to trade near $19-21, $24-26, $29-31, etc. during expiration week.
3) The put/call ratio is often a good contrarian indicator for price movement. When the option market is extremely pessimistic, lots of puts are sold (the buyers think the stock will go down) so the ratio goes up. The market usually ends up higher when the put/call ratio spikes up.
BTW, as others have mentioned, I don’t think that option exercising affects the prices much either.
any one has experiences on trading stock option?
did you earn or lose?
Yes, but only professionals should engage in it. 99% of amateurs lose money
can any investing guru eduacate on stock trading and option trading which is superior?
difference between stock trading and option trading
There is no such thing as a superior educator, there is only superior students. Are you one of those who excel in anything that you do? That is the most important question to answer. If you are the kind who do not have the persistence nor intelligence to excel in anything you do, then you won’t be a good options trader no matter who educates you.
Stock and options are two different instruments altogether. Options are contracts that allows you to buy or sell stocks. These options contracts comes with a price and moves with the underlying stock to varying degree. In this sense, buying options is not the same as buying stocks.
can any investing guru eduacate on stock trading and option trading which is superior?
difference between stock trading and option trading
There is no such thing as a superior educator, there is only superior students. Are you one of those who excel in anything that you do? That is the most important question to answer. If you are the kind who do not have the persistence nor intelligence to excel in anything you do, then you won’t be a good options trader no matter who educates you.
Stock and options are two different instruments altogether. Options are contracts that allows you to buy or sell stocks. These options contracts comes with a price and moves with the underlying stock to varying degree. In this sense, buying options is not the same as buying stocks.
question about option trading?
by trading options do you get a better return on your money than with trading stocks. I thought about trading options I just dont if the returns would better to make it worth while trying to learn option trading.
Answer 1:
It is certainly possible to an options trade to get a better return than a stock trade, but it is also possible for a stock trade to get a better return than a options trade. Options allow you to choose how much risk you are taking. If you choose to take more risk, you can make higher profits or losses. If you choose to take less risk, you will usually make smaller profits and losses.
Answer 2:
Options are what is called a "zero sum game." That means for every dollar one person makes on an options trade someone else loses a dollar. That means the average return from an options trade is zero before expenses, and less than zero after you account for expenses such as commissions.
Stocks are not a zero sum game. There are always at least as many long positions as short positions, so when the price of a stock goes up there are more profits created than losses. That means the average return on stocks is greater than zero, while the average return on options is less than zero. So, on the average, investors get a better return trading stocks than options. There are, of course, exceptions.
You should also be aware there are a lot of options traders who also take positions in the stocks underlying the options to control the risks associated with options.
Answer 3:
Option prices are generally more volatile than stock prices when measured in percentages. That means successful options traders often do get a better return, while unseccessful options traders often have huge percentge losses.
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All three answers are correct.