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Gold Cocoa Timber & Currencies Trend Trading Module
 
TrendTradeModule


A guide to  Option theory and Options trading strategies


Yahoo options
Indicators used in technical analyis
Buying the PUT
Finance topics

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Visual options analyzer

Option crawler


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Options trading


Although options are an extremely versatile trading tool, they are *not* suitable for investment purposes.


Apart from being tradable themselves, options can also be useful as a 'hedge'. 

Buying the Put option:

No matter what the current market conditions, it always pays to be ready for pullback.

Howto? By buying put options. A "put" option profits if a stock declines in price. It could be thought of as having an insurance policy. Therefore you can make money when a stock goes down.

A put option gives its owner the right to sell the underlying stock at a specified price. When you buy a put option you want the stock price to fall. Even if it falls to zero, your put option gives you the right to sell it at the specified price.

Although trend trading fundamentals still apply to some extent, because an option contract is a wasting asset, if you can afford to invest in a tool, this $40 visual options analyzer  and this more expensive $100 option crawler are relatively inexpensive examples of a useful one, without which it would be prudent not to trade heavily in options - the pros sell contracts, they tend not to buy them. Ask yourself why and be careful.

Watch this real-time action-research example of simple trading of leap, call option contracts, following predicted within trend volatility up and down as you might the underlying stock.

 

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