Articles by Wai Hoong Chin on ArticleSnatch.com

13 Steps For Profitable Call Option Trading

Sat, 06 Jan 2007 00:00:00 -0500

Many traders like to use more sophisticated options strategies in their trading but many times the simple call options trade is the most suitable trade for the market condition. Follow the steps below to increase your probability to profit from call option trading. 1. Determine that the price of the underlying instrument is going up. Trading call option is a directional strategy. This means you have to pick the direction of the market, and in order to profit the market should move up. There are many different ways to anticipate upward market movement. Some people respond to good market news and some use fundamental data such as increasing earnings per share, increasing dividend yield, increasing revenue, etc. Some use chart patterns that indicate upward market movement such as double bottom, reverse head and shoulder, ascending triangle, and upside price breakout. Some use other systems such as Elliot waves, and systems which use combinations of price patterns and other indicators. 2. Determine the target of the price movement. The system that you use to indicate an upward price movement should also indicate a target price for the movement. 3. **End Summary** Topics: option]]> options]]> option trading]]> options trading]]> call option]]> call option trading]]> call option investing]]> ]]>]]> About the Author: ]]> Optionsmindstorm.com is committed in providing valuable education, resources and tools to help traders to improve their trades. For a FREE options course, go to http://www.optionsmindstorm.com

How to use options to replace stocks or futures for massive profits and less risk.

Sat, 30 Dec 2006 00:00:00 -0500

Since options started being trading in exchanges, few people actually use options in their trading or investment. However, recently the market has changed. In 2005, 1.5 billion contracts are being traded in the USA. In CBOE alone, more than $200 billion worth of option contracts are being traded. More and more individual traders and institutional money managers are interested in options mainly because of their leveraged profit opportunities, ability to limit risk, ability to profit in any market environment, and the flexibility to create various strategies. What this means is that now traders and investors are able to combine different option contracts with different strike prices and different expiration dates to create profitable and suitable strategies for the market environment. Now the question is how do we use options to replace our current trading or investment strategies? A better question is not only to replace, but to replace in a way that boosts profit potentials and reduces risks. In stocks there are only two things you can do. You can buy the stock and profit when the price goes up or you can sell short the stock and profit when the price goes down. **End Summary** Topics: option]]> options]]> option trading]]> options trading]]> trading]]> stock]]> futures]]> invest]]> investing]]> ]]> About the Author: ]]> Optionsmindstorm.com is committed in providing valuable education, resources and tools to help traders to improve their trades. For a FREE options course, go to http://www.optionsmindstorm.com