How to Make a Killing through Options Trading for a Living
Options Trading
Sick of being broke? How Options Trading can make you a living. Jules Dawson explains options trading for beginners. Visit www.julecorp.com for more educational videos.
Everyone would like to learn how to become a millionaire, what you're about to read will help you whether you wish to join those ranks, or aspire to a lifestyle of your own design. My own family's personal comforts, and more, are thanks to the strategies discussed in this report.
Freeing ourselves financially was an experience that showed us once and for all that life really doesn't have to be difficult. Believe me, with this opportunity, I know how close YOU are to experiencing this for yourself.
Why share my knowledge of Wealth Creation with You?
Why am I telling you, about how I earn money?
Well it just so happens that there's always plenty of room in the winners' pool. In fact the addition of more players in the stock market doesn't inconvenience profit-takers in the slightest.
There are dozens of trading strategies out there. Many of them involve buying the very things we wish to sell, and selling the very things we wish to buy. You'll understand in a few moments, how money can easily be made whether share prices go up or down.
On a personal level, I believe that what I'm sharing is not some isolated opportunity. Nor is it a secret sworn never to be revealed. It's a way of trading that takes the sweat and tears out of the process and presents many opportunities to escalate one's wealth.
Sharing this with you also reflects my own response to the immediacy of poverty in my childhood. I've seen enough of it. So why not, I ask, try to make a difference?
How Do You Proceed?
Financial well-being need not be more complex than a simple step-by-step process. The steps are not difficult to understand or to follow. The first step to financial freedom is so simple it somehow gets overlooked. The wealthy minority though, always abide by it. That simple step is to formulate a coherent, do-able plan for achieving objectives in your life.
What we're looking for here is a step-by-step written plan. And when you write down your goal-oriented wish list, remember that your most powerful tool is your imagination... use it to help fill in the blanks.
Do you need help with the steps involved with wealth creation? Read on...
What Defines Wealth?
Let's quickly look at what wealth means for us generally. Wealth offers security and lifestyle. Not treadmill. It'll cover your living expenses... and then some. Its capacity to break chains and allow greater independence is, in a word, liberating!
Wealth hinges on three ingredients:
INCOME
CAPITAL GROWTH
INSURANCE
Income may be used to purchase well selected assets. Capital Growth can be expected from that investment which may be guaranteed against loss by Insurance.
What About Risks?
Many of us already know someone who is successfully trading for a living right now. Those who continue to trade for a living aern money steadily, not freakishly over night. Keep in mind that it's a case always of higher gain means higher risk.
Our aim here is to not overexpose ourselves to high risk games of chance, but to minimise our risks and at the same time retain our profits. You are out on a limb when you trade shares in little known companies. But the form is on the board with "Blue Chips" - established performers. These tried and tested favourites offer opportunities for profit with more peace of mind.
For many of us though, owning Blue Chip shares is expensive. What if I told you there's a way of trading Blue Chips in an affordable way...
Stock Options
Call options are contracts to buy shares.
Put options are contracts to sell shares.
Either way, buy or sell, each contract stipulates an agreed price and an expiry date.
Owning a share is more expensive than owning an Option over that same share. For example, a share might cost $15 to own, whereas $1.50 could buy an option to buy or sell that same share.
One option contract typically relates to a parcel of 100 shares on the U.S market and 1,000 shares on the Australian market. So in the previous example, lets say on the Australian market, control over $15,000 worth of shares would have an Option cost of only $1,500 (plus broker's fee, a relatively small amount).
Options present opportunities because they give you leverage. And making money on Blue Chips suddenly becomes more affordable and more effective.
To own an Option means paying a fee known as a Premium.
A person buying an Option is called a Taker. A "Taker" pays a Premium to acquire an option. He or she then has the right to sell that option, exercise the option (transact the 'buy' or 'sell'), or let it expire.
A "Writer" is paid a Premium for selling the option in the first place, which means he or she is under obligation until the option's expiry.
What Happens When Share's Go Down?
Which Shares Are Profitable?
Technical Analysis on the other hand involves graphing a share's trading history, usually in the form of a "bar" chart or "candlestick" chart. When we see a visual representation of a share's past and present trading performance, the price extremes (tops and bottoms) become obvious.
Spotting the obvious on such charts is relatively less complicated and more accessible than analysing the fundamentals (perhaps the reverse is true if accountancy is your forte).
Technical Analysis can push the odds in your favour by alerting you to forthcoming changes in share-trading trends. The tell-tale signs are known as "indicators". One example indicator is known as Support & Resistance.
These are lines drawn on the chart to mark a share price's tops and bottoms - the significant turning points of price behaviour. The more often a share price hits and rebounds from its support and resistance lines, the more reliable these turning points become.
Moving Averages is another technical indicator - used to confirm trends. Moving Averages are lines that trace the average closing prices over a selected period of time.
Professional traders, the world over, look for indicators to predict "turning points" at which the share price can be expected to change direction. These points are relied upon because it's reasonable to expect that share prices will not trade beyond their historical extremes but instead conform to past recorded history.
Computer trading programs automate the drawing of charts based on real trading data (input either by downloading from the Internet or by manual input). The programs' charts show a selection of popular indicators.
Simple Technical Analysis Tools, available with most good trading software, is all we need for the trading strategies we'll use.
"Our Options Trading Course For Beginners is the Easiest Way For You To Learn How To Trade profitably"
Live or Homestudy Options Trading Course
- Course Information
- A simple, fun way to learn how to trade face to face or study in your home at your own pace.
Why Trend is Your Friend
The Golden Rule of Options Trading
UP,
DOWN,
SIDEWAYS (staying basically within a narrow sideways band, showing no definite up or down trend).
An increase in the number of buyers causes an Up trend; a decrease in the number of buyers causes a Down trend. More motivational force is needed for an up trend than for a down trend. A down trend needs only a moment of fear or panic, whereas for people to participate in an up trend, not only is sufficient good reason a requirement, but also money is needed.
The secret to trading success is NEVER TRADE AGAINST THE TREND. It's a simple rule, but worth repeating: Never trade against the trend!
Question: How do you make a small fortune?
Answer: Start with a large fortune and ignore the trend.
So, how often should you trade against the trend... NEVER! Okay?
Six Rules for Buying Shares:
1) Never buy or sell shares without first checking charts.
2) Never buy shares because they appear cheap after getting smashed.
3) Never buy shares in a down trend.
4) Don't hang on to shares in a down trend.
5) Always be consistent. Buy shares in an Up trend and sell shares in a Down trend.
6) Buy Calls in an Up trend and buy Puts in a Down trend.
Additional Information
- Protected Buy Write
- Additional video explaining one options trading strategy.
- Group discussion on Options Trading
- Educational information and additional videos.
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