Are Your Options Losing Value?

By Donald Scott

Today we'll be discussing the differences between investing with stocks and options. Let's first tackle the less complex investing vehicle, stocks. Most of the world already knows, but in case you don't, stocks are directional trading vehicles. If we are long the stock, then we make money when the prices of the asset rises, and we lose capital as the underlying asset drops in price. We can also sell a stock short in which the profit comes when the stock falls. In any case when investing with stocks, the direction is what matters. We don't need to worry about market volatility or time.

So those are the basics about stocks, but what about trading options? Options are like trading 3 dimensional vehicles...direction, time and volatility. Let's look at a real-trading example to clarify the difference in the trading world:

A stock takes a full year to move up 10%. The stock trader who bought and held on to his stock has just made 10% on this particular trade. However, the option trader might have made nothing at all or even lost money if he just bought an option.

So why did the option trader lose money if the stock went up? Well, it's quite simple really. The option trader lost the time value of his options. Each option has time premium factored into the option price, and if the move doesn't happen fast, then the option trader will most likely lose money if he is simply buying Calls. Also, the volatility will most likely drop on the asset as the price rises, and this will also cause the price of the option to fall.

This is why we need to be educated in order to trade options. Simply buying Calls and Puts makes option trading very difficult because of the elements of time and volatility. Remember, options are three-dimensional vehicles, and if we don't understand how to manage these 3 complexities, we shouldn't trade them. After we understand options more in depth, these investment vehicles can make money in any type of market. Options are very adaptable and allow investors to be very creative once the understanding is there. - 23210

About the Author:

Are your current Option Strategies keeping you up at night? See why our motto is Max Safety, Max Reward trading options. Get your FREE Option Trading Video on Option Greeks by visiting us at www.SJOptions.com

Six Factors To Ponder When Seeking A Forex Broker

By Richard Henry

Selecting the right people to aid you could be your ticket to success in Forex Trading. As such, you must make sure you employ an agent that is worth every penny you pay him, and more. You see, a Forex adviser is the individual who will trade in your place, and whether you earn a profit or not, you will have to compensate him, in the form of a charge. So, if you do not want to waste funds, it is crucial for you to locate the perfect broker.

Here are six factors to look into:

1. Check their record. You will know if a broker is capable or not by looking at his numbers. If he is making a lot of money, it means that he is an experienced broker.

2. Scrutinize. A little experience check would not hurt. This could save you a lot of cash because it keeps you away from fraudulent brokers. You can inquire from the Commodity Futures Trading Commission or CFTC, or the Futures Commission Merchant or FCM. You should also make sure he is a member of the NFA, or the National Futures Association. If you find his records questionable, then look somewhere else.

3. Contemplate his deposit requirements. Although there is really no need for a deposit to initiate trading, many Forex brokers insist on it as a means of guarantee for themselves in case they will not be compensated by the investor. In spite of this, the deposit should not be too unreasonable; the regular asking rate is $200-$500.

4. Search out dependable and effective software. Your agent ought to be able to instruct you as regards the application of software as a implement in trading. You can utilize a demo account, which allows you to assess the software prior to purchasing it.

5. Bear in mind the use of currency pairs. This is something a superior broker should do, utilize an ample array of currency pairs. Short list a broker that uses the currency pairs you like, as each one has a distinctive pattern.

6. They musthave customer service. Trading is very dynamic, and at any given time, you will want the support of your broker. You do not want to awaken him in the dead of night just to trade. It would be very convenient for the two of you if your broker has a helpdesk you can call, 24/7. Of course, having excellent customer service is important too.

Before you enter the arena of Forex Trading, you need to go over these factors and see to it that you will be capable of tackling these in your search for a good broker. Foreign Exchange (Forex) Markets is only a place where traders can trade a currency for a new currency. It is a place where currencies can be bought and sold speedily and in real-time.

Well-known banks, large multi-national companies, local governments and other financial institutions use the Forex Market as a avenue for exchange.

What makes the Forex Market so admirable?

Since currency trading, involves hugh amounts of funds, many are attracted to the Forex Market owing to the takings they could make in one single winning trade. A large number of traders or companies earned millions in a single trade, that is why its unfeasible not to attract new prospective traders who are willing to risk their money in exchange for potential gain.

Uniqueness of Forex Markets

Forex Markets differ for the following reasons:

a. Forex Market attracts traders from universal markets, thus the number of trades are Gigantic

b. Currencies have the capability to be bought and sold promptly, without moving from the company itself, hence saving priceless loss in time and money.

c. Available in every hour of the day (except on Saturdays and Sundays).

d. With the Forex Market, it matters not where you are on the earth. There are no geographical limits.

Forex Jargon

Here are some of the expressions generally used in the forex markets:

1. RATE - selling price of one currency.

2. BID OR SELL PRICE - the amount which traders can vend currencies.

3. ASK, BUY OR OFFER PRICE - the amount which traders can buy currencies.

4. SPREAD - the bid price minus the ask price.

5. TRANSACTION COST - the amount charge to you when you make transactions in the Forex Market. It is usually the ask price minus the bid price.

The difference between the Forex Market and the Stock Exchange Market? The Stock Market trades in stocks, the Forex Market trades in currencies. Both markets involves buying and selling, the only difference is that with the Stock Market, rules are rigorously followed. This is to inhibit companies from monopolizing stocks. That is why the Stock Market is highly regulated and has a strict environment when compared to the Forex Market which has no such rules and regulations.

How to commence trading in the Forex Market?

The best thing to do to begin trading in the Forex Market is to do research and to talk to an investment company or stock broker that specializes in this market. It is critical for you to know what form of Forex Trading they do before you invest your capital. Go to the one that has a trustworthy background and to whom you could trust your savings.

The income can be really extreme but continually remember that Forex Markets change continually and it is really very risky to invest There. You could net a lot today and lose everything tomorrow. So know when is a great time to buy and sell your currencies.

The best advice is that you must play your money smart, think really hard before making very important decisions and be very well informed, that is the basis to success in very nearly any trade or profession. - 23210

About the Author:

Submitted by Richard Henry Author of this article. To find more of topics as Forex an Currency Trading goto the web site at 6 Factors when Seeking A Forex Broker or 6 Factors when looking for A Forex Broker NOTE article seen above can be circulated freely on web sites, as long as ALL article content and author information remain UNCHANGED.

Do You Want To Know How To Avoid Foreclosure?

By Annabella Sherie

We all know that no one ever wants to lose their home to foreclosure; however in the past year it seems like so many people struggled with learning how to keep their home out of foreclosure. If you have come to the internet for tips on what you can begin doing to avoid foreclosure; you are not alone.

If you have just purchased your home then you will want to know how to protect it; there is nothing wrong with learning about how to avoid foreclosure so you can protect your family. We have written this article in hopes of being able to provide you with some great tips and resources that you can use to protect your loved ones.

Be sure to use the tips below to learn how to avoid foreclosure and you will realize that you should not have to worry about any type of financial issues.

1. Don't Purchase More Than You Can Afford: The sad truth is that many people will find themselves in situations where they have purchased more than they can afford. If you are a first time home buyer; you want to make sure that you do not over stretch your budget by buying a home that you can not afford to purchase.

2. Start Saving Money: We all should be more concerned with saving money in case we have an emergency arise or have some type of financial situation. Statistics show that people who are able to survive a financial hardship are the ones who have at least enough savings to get them through 6 months of hard times.

3. Make Your Payments On Time: Whenever you have a mortgage you want to ensure that you are always on time with your payments. As soon as you get behind the banks have the right to begin the foreclosure process; however they really do not want to take back your home. The only reason that a bank will step in and take your home is if you fail to make your monthly payments.

These are just a few of the tips that will help make being a homeowner a pleasant experience. If you want to learn some more tips that will keep you from having to face these financial difficulties then be sure to keep reading.

Everyone who has purchased a home or is getting ready to purchase one should be concerned with this topic. If you want to learn more about what you can do to learn how to avoid foreclosure then be sure to visit the site below. - 23210

About the Author:

House Foreclosure How To Avoid It!

Start Making Money Through A Forex Trading System Course

By Mark Walters

The trading of foreign currencies is an exciting opportunity to earn money. Lots of people already know this, but they don't know how to get started with it. A forex trading system course can be a way to get your foot in the door. Without having a proper understanding of what the foreign currency market is, and how it works, you risk losing everything that you invest.

When you want to get into forex trading, it helps to first understand what essentially forex is. Just saying currency trading probably doesn't mean a lot to most people. Every time a holidaymaker travels to another country and exchanges money, they are trading foreign currencies. This is a small scale example, but it's one that everyone can relate to.

The exchange rates of currency are always changing. One day you might be able to exchange 100 USD for 60 Euros, and the day after those 60 Euros might be worth 110 USD. It could also be less. Though, the value of one currency against another very rarely fluctuates that much in a day, this example nicely highlights the potential of forex trading.

However, though the value of a single currency doesn't change too much over the course of a day, the large number of currencies and the sheer volume of money being passed through the market (as much as $1.5 trillion daily) mean that there is still big money to be made. Of course, this can also make it a very risky market so a strong forex trading system course will give you the information you need to help you stay in the black.

There are a lot of things to take in when it comes to learning your way around forex. At the very least, you need to develop an understanding of how the market works and you need to know how to make use of the tools and software at your disposal.

You can either take on-line courses or go to a location that offers hands-on training for your forex trading system course. For a small upfront fee, there are plenty of forex course providers who can show you what you need to know to start making money through forex trading.

Sadly, amongst the many reputable forex trading system courses, there are also some who charge extortionate fees for useless or out of date information. Therefore, it's essential that you check the credentials of any course provider before signing up with them. - 23210

About the Author:

Got the idea of how you can make money from different currencies? For more information on how you can have a forex trading system course work to your advantage, take a look at http://www.compareforexproducts.com

To Succeed in Investing, Don't Become Fixated by Your Own Success

By Sam McNeill

What follows is a true and factual story. A University in the US did an experiment to understand more about the psychology of success. This experiment has subsequently been repeated a number of times at different places and by different people.

The experiment is straight forward. It asked people to guess the outcome of tossing a coin. The outcomes are either heads or tails and you guess the outcome and then you are either right or wrong.

On probability, if the coin is tossed you have a 50% chance of guessing correctly which way it will end up. The experiment required 500 tosses of the coin and the outcome followed the laws of probability of around half of the tosses producing a correct guess. This probability outcome is fairly well understood by the experiment subjects, and people generally.

What you may not be aware of is that in the 500 tosses there is a fairly good chance that you will put together three or four runs of guessing five tosses in a row correctly. And here is where the psychology of success takes hold. What the university experiment did was asked the people guessing the outcome of the toss how they felt about their performance at various times.

What they found was that when people were having successful runs - four or five or six correct guesses in a row - that they believed that they themselves were responsible for this success. Reasons ranged from, I am getting better at this, to I am now concentrating harder and that is improving my performance.

Let's stop right here. People who know that the outcome of a guess is based on a strict 50% probabilistic outcome believe that when they have a few guesses correct in a row that it is because of their talent and ability. How scary is that.

Yet this happens with people investing in the stock market all the time - especially people new to investing and trading. After a winning trade or two or three, the investor or trader begins to believe that they have a special "talent" for stocks and shares. They begin to believe that they are naturally better than the average trader.

The outcome, before too long, is that the investor's belief in their own ability results in over confidence. This over confidence results in trading too many stocks or trading without managing the risk inherent in any trade. Unfortunately the stock market has a nasty habit of slapping down over confident traders with a big loss.

So remember, every trade you take has risk which you need to manage. If you manage your risks and enjoy the chance string of winning trades from time-to-time you will be successful and you will avoid the Market Slap! - 23210

About the Author:

Learn more about how to trade shares with Just Shares and visit our website where you can find out all about Just Shares' share trading course and how Just Shares can help you be successful in trading shares.