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Saturday, March 7, 2009

Understanding Option Of The Spread Money

By Walter Fox

Yes, a professional non-market day trader with stock options and stock options for the swing I understand you have the option to use the spread in the wild days of confusion can make money. While I work in the office almost every day because I am always the possibility of normal to do what I do.

While my "catch and the" recent stock portfolio keep plunging market has suffered during, I was almost a daily basis on my stock options trading account with my something very good to make the big percentage gains in mild setback Is enabled.

While my stock option trading strategy may seem naive to the professional traders my success cannot be denied. I have made an average of 40% a day on the days of the wild market swings. While this wild market continues I think this is an excellent options strategy that the average part time trader can do from his office.

This is how I have been able to make some very significant money trading in the options world. First I only trade 2 stocks in my options trading account. The reason being that since I am doing this while I doing my normal job I dont have time to really follow more stocks. As one really needs to understand the stock, almost be at one with it so you know how it will react when the market plunges or skyrockets. To understand the stock I study how it reacts to the extreme market activity with in its trading range. As an example lets say I am trading a stock A. I need to understand that when the market plunges 200 points "A" usualy goes down lets say 2% or 3 % and whne the stock market goes down 500 points it usually goes down lets say 5 to 7% and then does about the same to the countering up moves in the market. I dont really care about earnings etc but I make sure my 2 stocks are not carrying any special baggage that would influence their movement outside of the market swings ie. the bank stocks etc.

Once I stock my 2 how these studies range.Lets market trading activity will reflect the understanding that these swings between 63 and 57 during the stock trades at roughly. So I would say this is a study of options is 57.50, or 60. I really in the last month that these options is very small at dose learned. One of the options I could buy a small number of examples, as he said, only 100 company and I am a business makes a fortune on 5 for a full day options. I value my buy or sell is duly noted as'm happy to see that high or low dose 5 options with my one. Although the bid is a very real importance to understand and must be careful when you ask spread your options trading strategies are developing. The spread of small or market price as the previous business with nothing to do well or drowned last price soared way past activity can be.

As far as which options I like to play in my stock options spread activity I basically use options that have an expiration date of at least a week and feel more comfotable in the one month range. I also like call or put options that are just slightly in the money. Meaning if the low end of the stock tading activity is lets say 58, I would normally buy the 57.50 calls.

Maybe I am totally naive or just lucky but with todays markets I find trading stock options based on my method gives me one or 2 opportunites every trading day to play this strategy.The key if to truly understand how the stock you are playing reacts to large movement in the general market.

In summary I let the market drive the stock price down or up on 2 stocks that I follow very closely. When the market drive the price of the stock either up or down dramatically I then trade the option based on the stocks trading range that I have developed by watching the stock and its reactions to huge moves in the market. This has worked nicely for me but one must be able to have a computer with real time stock market access to alert one to the market moves.

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