Online stock option trading information and strategies

April 15, 2008

If you want to earn lot of money with little investment in stock market, you should jump into online option trading in stock market.

An option is a contract, which gives the buyer the right, but not the obligation to buy or sell shares of the underlying security at a specific price on or before a specific date. You have to treat it as a gamble, where for small investment you can get big return ( if market goes in your favor). If market goes against your expectation, you have to loose completely your small investment in options.

Online option trading is available with most of the leading broking firm like

Most of people think that options trading is highly risky business, but the fact is option trading may be a safe and more economical business if you understand the options trading correctly.

To get more benefit from option trading following strategies to be applied.

1. Current month’s option is more useful in comparison to next or latter month’s stock option, because you need to lock your money for less period.

2. American type option is far better than European type option, In American type option, there is high probability that market will move in same direction as you expected at least once before the expiry date of option.

3. Whenever you find that your option is in profitable stage, book your profit by exercising your option right, don’t wait for more time to get more profit.

4. Don’t bet for approximate current valve of market price, stock market is always fluctuating. There is high probability that at the end of life of option contract, market value of stock will not be near to value of current market value.

Above suggestions does not guarantee any profitable return. So invest carefully.

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