Credit Spread – Oh Man, I Want My Mommy…

The Credit Spread option strategy is one of the most popular option strategies available to traders. Unfortunately, it is also possibly the most dangerous.

The thing is, when rookie option traders first hear of the credit spread – very few seem to able to resist the temptation to jump right into trading them – with too much real hard earned money on the line – and not nearly enough education.

And it seems that a good percentage of them – if not most of them – promptly wind up getting their groins kicked in, their heads ripped off, their eyes poked out, and getting hurt really, really bad.

Now stop – wait – hold on just a second.

I don’t want you to get the wrong idea here. So let me explain something.

I actually LIKE credit spreads. I like them ALOT.

I think that the credit spread really IS a great trade.

And all those stories and claims about making 5 to 10 percent a month while barely spending any time looking at market – and how the odds are so unfairly on the side of the credit spread trader – and how trading credit spreads is just like becoming the ‘house’ instead of the gambler – yes – I believe all those claims and stories too. In fact, not only do I believe those stories – I KNOW they are true – because I experience it myself first hand on a regular basis.

The big problem is that there is some very important information being left out of those credit spread claims and stories. Information that I’m sure would keep alot of rookie option traders – who frankly just don’t know any better – from blindly making that ‘over-confident’ leap into the credit spread abyss.

Yes it’s true that credit spreads and iron condors can be put on with an eighty to ninety percent probability of winning. And yes it’s true that they can generate returns of over ten percent a month. BUT – they also come with a dangerous risk to reward ratio that can be in the range of ten to one.

That means that while trading these trades you are putting at risk 10 bucks for the chance to make just 1. Or – in reality, in the instance of say a standard ten lot index iron condor, you are risking ten thousand dollars for the chance to make just one thousand dollars.

And as my dear old mammy used to say: ‘that smells a lot like an awful bad egg’. Which in fact it is. That risk to reward ratio is nothing but a low down, no good, smelly rotten deal!

Even with the ten percent monthly returns and the high probabilities – all that needs to happen is for a problem month to come along (and it WILL, believe me) – and the next thing you know you’ll be staring at a gigantic loss and a zero balance account!


All isn’t lost. There IS hope…

Like I said before, I LOVE the credit spread trade.

And – I consistently make money from it.

So clearly there must be a way to profitably trade this strategy without allowing that awful risk to reward issue to get in the way.

And yes, there certainly is.

It all revolves around how you go about handling the trade.

As long as you learn the CORRECT way to initially place these trades, then combine that with a super simple management technique and a few easy adjustment tricks – this risk to reward issue can be completely eliminated and no longer presents a problem.

Once you possess the correct credit spread trading knowledge and know how – and understand how to apply a couple super easy to implement adjustment tricks – you’ll know exactly how to exterminate any problematic market threat that comes your way, allowing you to experience the Credit Spread strategy for all that it’s ‘actually’ cracked up to be.

To learn a much ‘better’ way to trade the Credit Spread trade for monthly income, visit this Credit Spread training website for simple step-by-step instructions on how to correctly place, manage, and ADJUST credit spread trades.

Weekly Options – Advantages and Disadvantages

The Various Advantages of Weekly Options

Short-term advantage can be derived from Weekly Options than monthly options. The advantage is that you have the ability to make a very short term bet on an anticipated sudden price movement or a certain news item.

For example, you are betting that the EFG stock is going to move on the first week of the month as their earnings report is due that time. When you buy or sell the EFG monthlies to capitalize on the theory you just made, you are going to risk three week’s worth of premium when you are proven wrong and EFG moves against you. Weekly option is short-term and you may take out mistaken investments after a week. Weekly options can still be a viable option because it saves your money and provides good return if correct investments were chosen.

On the other hand, weekly options volume and open interest may not become as high as monthly options despite of any strikes. Strong pinning action is very evident on monthly option than weekly option. Pinning action is where the stock tends to settle toward a strike price on its expiration day.

Some Disadvantages of Investing With The New Weekly Options

While there can be advantages for weeklys, there are also disadvantages that can be spotted with the use of weekly options. One of its disadvantage is its lifespan and duration. There is no much time to fix mistaken investments. There will be complexity on strikes adjustment and any instant changes can be difficult. Weeklys may not guarantee good income every now and then. Some of the strikes will have very wide spreads which is not good for strategies that are short term.

To Wrap Up

Either of the options bear an advantage and a disadvantage – including when a trader is Weekly Options. You can have a quick profit or loss out of it. The investors should know how to utilize this to their advantage.

To learn these ‘tricks’ to trading Weekly Options , to over to this Weekly Options website and catch my free video. It will showcase an exceedingly easy technique for acceptably placing, managing, and ADJUSTING these types of trades.

A good option trade for iron condor traders who are seeking to build up their option trading repertoire is the Weekly Options Double Calendar spread.

What exactly is this trade?

It’s basically just two separate calendar spreads placed on the same underlying, usually situated on either side of where the stock or index is presently trading at.

What exactly is a calendar spread?

A calendar spread is the sale of a closer month option (many times the closest month option) sold at a particular strike price – and the purchase of a farther out month option (many times the next month out option). The farther out month option is purchased at the same strike price as the one that was sold.

Immediately below find an example of a calendar spread on an underlying we will name XYZ.

Sell 1 June 30 Call Buy 1 July 30 Call

Calendar spreads produce income from the reality that the closer month option value loses value at a faster rate than the farther out month option.

A calendar spread creates a rather narrow profit tent over the current price of the underlying, while two calendar spreads (a double calendar spread) creates a profit tent that is quite a bit wider and protects a larger area around the underlying current price. This is one reason why iron condor traders find these trades attractive.

Here is an example of a double calendar:

Sell 1 June 25 Put Buy 1 July 25 Put Sell 1 June 35 Call Buy 1 July 35 Call

A benefit of the double calendar spread when put up against other option income strategies such as the iron condor trade or the credit spread strategy, is the reality that the double calendar spread can handle big violent moves in the stock market much better than other option trades. When one looks at the risk graph of the double calendar trade and then looks at risk graph of a similar iron condor trade, it is very apparent that the double calendar can withstand a quick big move with less pain then if the same move were to occur to an iron condor trade.

Furthermore, soaring volatility rewards the calendar trade, basically pumping further gain into the position. So in a situation wherever the market suddenly tanks and moves downward, what might be a disastrous scenario for an Iron Condor trade could turn out to be a great circumstance for a correctly setup Weekly Options double calendar position.

Altho Weekly Options Trading can be a terrific tactic to produce passive income, of course like any investment scheme there are probable hurdles option traders should be mindful of before trading this way. To study more about how to suitably trade this scheme, visit Weekly Options site now.

What to look for in an Online Trading Portal

Stock trading, a couple decades ago was most commonly used by major corporations and well off businessmen. Most individuals stayed away from such forms of investing as they were unaware of how the stock markets work. The risks of trading were what most individuals would concentrate on rather than the returns one could receive.

This spirituality has changed to a certain extent in the last decade or so. Today it is very common to find a number of small businesses as well as individual investors that are actively involved in the stock markets

Earlier, trading could only be facilitated with the help of a broker that one would go to in order to buy and sell shares. Careful consideration would have to be taken in order to pick a broker that is licensed and would make the most profit for the individual. This broker would provide all the necesary knowledge about the available options and would help the investor to create a well diversified stock portfolio.

The use of the Internet however revolutionized the way that trading was carried out. With Online trading one no longer had to make time to physically go to a broker. The investor now has the option to trade from the comfort of his/her own home at any time that he/she chooses.

An online trading portal is an essential component in the world of Online Trading. An online trading portal may also be known as a financial portal. It is a website system which allows traders as well as broker’s access to a large array of financial news as well as information. This enables investors to make sound decisions with regards to trading.

There are a large amount of different companies that provide such financial services to investors. This is why it is very important to choose the appropriate online trading portal that suits the investor’s individual needs along with being reliable. While choosing an online trading portal it is also important for the investor to choose reliable trading software to trade on an online trading platform.

When choosing a good financial portal, one must pay careful attention to the company that is the provider of the portal. The investor must find out all of the information available on the company by going through online forums and asking other investors. The aim is to ensure that the company has a reputation of being reliable and trustworthy.

This is a very important step as internet platforms are easily susceptible to fraud and identity theft. Hence the investor must be sure that his information will be safe in the hands of the company and will not be disclosed to a third party.

A good online trading portal should also provide the investor with articles, research and recommendations from analysts. They should have links to relevant sites, online discussion forums as well as chat rooms.

Get the latest equity , all you have to do is check the trading website.

With the recent downturn in the economy many individuals have decided to start managing their own portfolios which leads them to try to figure out how to trade stocks on their own. Luckily since the turn of last decade many online brokerages have allowed individuals much greater control over their own destinies when it comes to managing their own portfolios. We’re going to give a brief overview of how to trade stocks with clothing companies issued shares so that beginners can get started off on the right foot.

Prior to beginning your education on how to trade stocks you should become acquainted with both the primary and the secondary stock market. The primary market simply references the initial phase of a company going public. This is known within the world of stock traders as IPO or initial public offering.

Learning how to trade stocks you can begin with either small or large amounts of money. If you’re just looking at investing in what are considered penny stocks or stock that trade for under a dollar a share then you can get in for as little as a couple hundred dollars. But if you plan on holding on to blue chips which are stocks that belong to major companies like IBM, Microsoft, Yahoo or Wal-Mart than you’d better come to the table with thousands of dollars to invest. Either way the path to figuring out how to trade stocks and can be littered with disappointment so you may want to seek the advice of a financial advisor prior to striking out on this endeavor.

Because of the potential risk involved in investing in learning how to trade stocks it’s important that an investor do their homework prior to making a purchase. There are many outlets for doing research on companies. Thanks to the Internet you have access to companies’ information 24 hours a day seven days a week. Also if you sign up with any online brokerage be at E*TRADE, Ameritrade, Scottrade or one of the numerous other online trading venues you will find that they offer comprehensive tools for assessing the financial stability of companies that you’re considering purchasing shares in.

Because of the possibility of losing money it is advisable to do research on any company prior to choosing to purchase stock in that company. While figuring out how to trade stocks it can be beneficial to use an online trading source like E*TRADE, Ameri-trade or Scott-trade all of these online vendors come with stock researching tools allowing you to do the necessary background research prior to making a decision.

Learn more about infant toddler clothing issued shares. Stop by Henry Taylor’s site where you can find out all about infant boy clothing shares.

A great way for option traders to generate consistent income in extremely volatile markets is called Gamma Scalping . When the market / underlying instrument is making huge moves and swinging around wildly, this is a strategy that thrives – unlike the traditional monthly income strategies such as iron condors, calendars, credit spreads, etc.

One way to think of gamma scalping is to compare it to day trading – where the trader is looking to capture profits from quick little moves – however the difference here is that due to this strategy set up – most of the risk that is normally associated with day trading has been removed. The set up for this trade can profit regardless of what the stock or index being used winds up doing. If it moves up, a gain is made. If it moves down, a gain is made. And then, when a profit has been realized, the trader can immediately lock in that profit and ‘re-set’ the position so that it will profit again regardless what happens from that point forward.

Similar to a straddle, when using this strategy, we don’t care what the market ends up doing. We are properly set up to profit either way. Up or down, it doesn’t matter. The underlying just needs to move.

This option trading method allows the trader to continually grab – or ‘scalp’ – profits from the same trade position. Once a profit is realized from a move either up or down, the trader locks in that gain using a super easy to implement adjustment method that not only captures that profit – but also re-sets the position to once again profit either way the underlying winds up going. And this can be done, over and over again on the same position.

How many times have you purchased a stock or option and wound up actually being right and seeing some profits – only to have the underlying immediately turn around and retreat back to it’s starting position wiping out all the profits?

Gamma Scalping eliminates this. When profits are realized – gamma scalping allows you to capture them forever. And if the underlying continues the move – or heads back to where it started from – MORE profits continue.

During wild crazy times, especially like the extremely volatile markets we are currently experiencing in the markets, Gamma Trading should be considered a ‘must have’ method for option traders to learn how to use correctly.

And along with being stress free and profitable – it’s fun too.

To find out more about gamma scalping , visit Ted Nino’s site on how to correctly trade the iron condor and gamma scalping strategies for consistent income.

Every time tax season rolls around, people panic. This is because filing a tax return can be an extremely confusing and drawn out process. Luckily, tax software can help streamline the process and reduce your headaches.

Choosing a computer program for your taxes is a very difficult decision to make. However, there is one feature that every program must have, which is frequent updates that reflect the latest changes in taxation laws. Using an outdated application could result in mistakes and penalties.

There are several features that you will need to look for in a computer application for this purpose. One of the most important features is that you need to be able to understand how to use it. This will help you complete your return with ease and with a higher level of accuracy.

Generally, programs that include a step by step wizard will be easier than other types of programs. This way, you only have to focus on one thing at a time. Each step should also be explained in very simple terms that you understand and every calculation should be done for you automatically.

You should always use a program that clearly explains your options for deductions. This way, you can minimize the amount you owe or maximize the amount that is returned to you. Try to choose a program that explains your deduction options on its own special screen.

To stay on the safe side, you should run your tax return through any computer program twice before mailing it in. This will help you weed out any possible mistakes that were made when you first filled out your information.

When you choose the best tax software for your needs, you can get your return filed on time and with less effort. However, if you can afford an accountant, you should still consider using their services because their experience can often help you find savings that even the best computer programs can’t find.

Learn about how to report a wash sale on schedule d with TradeLog. If you currently trade stocks, bonds, options, mutual funds, or single-stock futures and have ever attempted to report these on an IRS Schedule D, then you understand how painful this can be – It is the worst!

Advanced Tips For Online Trading Success!

Trading the Forex market can be tremendously exciting and rewarding but that doesn’t mean that starting out can’t be nerve wracking and at times frustrating. That’s why eToro offers you these 10 top tips to help you trade:

1. Get Your Feet Wet Gradually. Most new Forex traders start by opening many trades and then find it hard to monitor them all. By focusing on just a very few trades in the beginning you’ll give yourself the opportunity to keep track of your trades, and to figure out how to adjust your trading approach according to market movements.

2. Stop Forgetting Your Stop-Loss! The key cause of unsuccessful Forex trading is excessive losses and the single biggest cause of losses is incorrect portfolio management. Remember that a Stop Loss is not there for decoration, it is there to prevent your losses from mounting up. Use it wisely and you will soon see your loss rate reducing!

3. Build A Forex Trading Plan/System. Every trader develops their own individual trading system, depending on the amount of time they dedicate to trading. Traders with more time may adopt a day trading strategy, while others might prefer longer term positions. The important thing is that, whichever trading style you adopt, you stick to your trading plan. Many new traders who experience losses find themselves tempted to switch approaches, however one or two losing trades don’t necessarily mean that your trading system isn’t going to be a profitable one.

4. Don’t Cut Your Profits Short. The number one mistake new traders tend to make is closing their winning trades too early. By sticking to your trading plan you can learn to avoid making hasty exits that reduce your potential profits.

5. Don’t turn Profitable FX trades Into Losing Ones. Once the market is going your way and your positions show a profit, keep a close watch on them. Move your stop loss forward to your entry point to secure your investment. Then keep moving your stop loss forwards in the direction of the trend to secure your profits and prevent your trade from slipping back into a loss.

6. Beware Of Scaling In. Scaling in is a Forex trading strategy where an investor increases his position size when the position is negative, hoping that it will retrace back and close all the positions in profit. Using a Scaling in strategy isn’t necessarily a bad thing but it can quickly wipe out your account if you don’t know how to use the strategy correctly. As such it can be a risky approach for a beginner trader.

7. Plan Ahead. Never enter a trade because the price is suddenly rising or decreasing. Always plan your trades in advance. Know your desired entry point, Take Profit and Stop Loss rates before you trade and wait for the right opportunity to arise.

8. Preserve Your Capital. Profits are there for the making, but the real key to lasting Forex achievement is not just to make profits, but to keep them. Letting profitable trades run, cutting your losses quickly and keeping cool under pressure and in line with your trading plan is you key to profitability not for a single trade but across all the trades you make.

9. Trends Carry Momentum. New Traders are often unaware that as a new trend starts to build its momentum tends to increase. Additional traders will tend to jump on board an emerging trend, strengthening it as it continues to develop. Try to trade with the market’s momentum on your side, as it will often push your trades in the right direction, hitting your profit targets sooner than you might expect.

10. Don’t Waste Your Time On A Losing FX Trade. If you find yourself in a losing position, remember that it is better to save your energy, cut your losses and move on to the next trade. The FX market is full of profitable opportunities, just waiting to be exploited, so don’t waste your time on an unprofitable trade!

These 10 trading tips can help you achieve positive results in your Online Forex trading activity. Reading about them is not enough, however. Successful trading is all about real market experience so to start implementing these lessons now by real trading!

Prof raminozisky rammi teaches on How to Execute a Forex Trade , Forex Trading Glossary and Forex

Personal Finance And Stock/Currency Trading

Personal finance and stock/currency trading go hand in hand and compliment each other. Even if you don’t trade your own money, if you own a retirement fund then odds are your money is being traded.

Stock trading has been around for a while, and it has defined the lives of many people over the years. Many people have gained fortunes in stock trading, and many people have lost fortunes in stock trading.

I used to believe that I wanted to be a stock broker as my job. I would even watch Jim cramer and pretend that I was using my own money to trade stocks. I would watch the price movement of the stocks I bought from day to day to see if they had gone up or down. It was very exciting to me and I loved doing it. It’s thrilling to gamble your money away.

It can be argued though that stock trading is not gambling, and this is true for the traders who actually know what they’re doing. To the general public it’s still a gambling game though. This is simply because most people don’t have the knowledge to make good stock market trades, so they really might as well be gambling.

In recent years, the currency trading market has become much more popular. A lot of traders of the stock market are switching over to forex trading for the many benefits that it has. Two of the benefits are much better commission rates, and the market is open 24 hours a day for over 5 days out of the week.

The stock market isn’t open 24 hours a day so they don’t get as much freedom as to when they want to trade the market. This is just one of the advantages to forex though. It’s a very good advantage.

Please visit best forex robot for more information.

The iron condor is one of the most popular option strategies available to traders. Unfortunately, it is also possibly the most dangerous.

See here’s the deal: when a new fresh faced option trader first hears of this trading strategy – he or she becomes so enamoured with it that they just can’t seem to help but jump right into trading them – risking way too much money – and without much thought of what they are going to do if the trade starts to go wrong.

And unfortunately what always seems to happen to a high percentage of them is that they promptly wind up getting their trading accounts demolished and their heads handed to them on a platter.

Now stop.

Before you start to get the wrong impression, please, let me clarify something here.

I absolutely LOVE iron condors. ALOT. In fact, the iron condor is right up there as one of my favorite trading strategies.

And I think it REALLY IS a good solid trade.

And those claims and stories of ten percent monthly gains and ninety percent probabilities? They are absolutely true.

The big problem is that there is some very important information being left out of those iron condor claims and stories. Information that I’m sure would keep alot of rookie option traders – who frankly just don’t know any better – from blindly making that ‘over-confident’ leap into the iron condor abyss.

See what isn’t being talked about with iron condors is that while yes, they can provide great monthly returns and high probabilities of winning- they also come attached with a horrendous risk to reward ratio – sometimes as poor as 10 to 1!

10 to 1! That means that in order to try and make just one dollar, you need to be willing to risk ten. Or, put another way – in order to make 100 dollars, you need to risk 1,000 dollars. Or – risk $10,000.00 to hopefully make just $1,000.00!

And as my dear old mammy used to say: ‘that smells a lot like an awful bad egg’. Which in fact it is. That risk to reward ratio is nothing but a low down, no good, smelly rotten deal!

Just do the math. With a risk to reward like that, even with the great probabilities and wonderful monthly returns – before long a problem month could come along and completely wipe out your entire account!


All is not lost…

Because – as I wrote previously – I REALLY DO like the iron condor strategy.

It’s one of my favorite trades – and it continually generates profits for me.

So obviously there’s a way around that horrible risk to reward issue and the inevitable problematic losing months.

And there is.

It all revolves around how you go about handling the trade.

That risk to reward problem quickly becomes a complete non issue as soon as you educate yourself on the proper way to initially set these trades up and how to correctly manage and adjust them.

You just need to take the time BEFORE jumping into the iron condor pool to equip yourself with this little bit of knowledge. A few simple ‘tricks of the trade’ – so when those problem months DO come along (and they WILL believe me) – you will know exactly what you need to do to immediately squash that threat, easily adjust yourself out of the problem, and experience the iron condor for all it’s ‘really’ cracked up to be.

To learn a much ‘better’ way to trade the Iron Condor spread for monthly income, visit this Iron Condor site for simple step-by-step instructions on how to correctly place, manage, and ADJUST iron condor trades.

categories: iron condor,option trading,stock trading,stock,trading,forex trading,forex,currency trading,stock market,investing,investment,finance,personal finance,wealth building

 Page 2 of 2 « 1  2