Here’s a shortcut on how to come up with a price target for a stock just like the fundamental analysts do. Many of us are familiar with the concept of the Price-Earnings (P/E) Ratio. It is often used to determine…
The bane of the trader who buys options is the passage of time. He knows that every day his position is moving closer to expiration, the day after which the option ceases to exist. All of the time he paid…
To make money in the market, it is said that one must “buy low and sell high.” But it doesn’t matter which comes first! Shorting allows stock bears to sell first and buy later at a lower price, profiting from…
A trader’s most valuable tool is not a type of software nor an online ‘service’. It’s simple, and it’s free. You can create one using a pencil and a notebook – a trading journal. Keeping a trade journal tracks what…
How to size one’s options trade is a subject that is certainly open to much debate. However, for traders looking to use options as an alternative to stock, here’s a simple way to think about how many calls to buy…
A trader who owns 10 calls controls 1,000 shares of stock. If exercised, those 10 calls turn into long 1,000 shares at the strike price. From this point, the trader will make or lose $1,000 for each $1 change in…