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Options Trading Made Easy

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The amount of stock options being traded in America is exploding! This is great news because there is far greater liquidity in the options market and many more money making opportunities for individual traders just like you. During the next ten weeks I will be writing articles on how you can profit from one of the fastest growing areas of financial investment available to individuals.



But before I start you may be wondering what a stock option is. Simply, a stock option gives you the right to control the ownership of a stock for a fraction of the price to buy it. There are two types of options; the first is a Call Option which is the option to buy a share of a certain company for a predetermined price before a predetermined date. The second is a Put Option, which is the option to sell a share of a certain company for a predetermined price before a predetermined date.

For example if you purchased 100 shares in ABC Company that traded at $50 each, you would have to invest $5000 to buy those shares. However you could buy 100 Call Options priced at $5 each, with the right to buy ABC Company at $50 any time up to a date in the future (say November 16th) and you would control the same amount of shares for only $500. If the price of ABC Company goes up by $5 and you owned the shares you would have made $500 or 10% on your $5000 investment, however because the Call Options give you the right to buy the shares at $50 and they are now worth $55 the price of the options would go up $5 as well and you would have made $500 or 100% on your $500 investment. This example demonstrates the great leverage stock options provide.

Call Options are used when you expect the price of a stock to rise, if you expect the price of a stock to fall you can buy Put Options, which as mentioned before, give you the right to sell a stock at a predetermined price. So in the example above if the price of ABC shares fell to $45 and we had bought Put Options giving us the right to sell ABC at $50, the Put Options would be worth money because you could buy ABC shares in the market for a cheaper price than you could sell them for. This is a great benefit of options trading, you can make money in an up market or a down market!

To summarize a stock option has four components to it:

1. The underlying stock

The stock that the option is traded on (ABC Company in the example above).

2. The exercise date

The predetermined date, before which, you can use or exercise your option. Options always expire on the third Friday of each month (November 16th in the example above).

3. The strike price

The predetermined price you can buy the stock for ($50 in the example above). 4. The type of option

Either a Call or a Put option.

Now that you know what an option is let me share with you the first key to successful options trading. It is very simple: practice, practice, practice. I cannot stress enough how important practice will be to your success as a stock options trader. Trading options is an inherently risky endeavor, however by learning the keys to successful stock options trading it is possible to mitigate this risk and maximize your gains. Options are a zero sum game, in a zero sum game for every winner there must be a loser. I'm sure you want to be a winner and not a loser, right? If you take the time to learn all there is to know about trading options successfully before you trade with your hard earned money you will be a winner. It is only when you are winning seven out of ten trades on paper and you are confident in your trading plan and money management techniques that you should trade in the market for real. By the time you have finished reading these articles you will have a plan and know just what those money management techniques are. Look out for Key #2 coming soon.

US Government required disclaimer: Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of the Characteristics and Risks of Standardized Options. Copies of this document may be obtained from your broker, from any exchange on which options are traded or by contacting The Options Clearing Corporation, One North Wacker Dr., Suite 500 Chicago, IL 60606 (1-800-678-4667).
Options Trading Made Easy
Now think back and remember a time when someone said to you, "Excellent! Well done! Brilliant!" Close your eyes and really remember the picture of where you were, what you were doing and how you felt ' really hear the words that the person said to you clearly and let the warm feelings of success and pride cover you like a lovely warm blanket. Take those great feelings and sounds and pictures and spin them up and down through your body and then squeeze your right hand into a fist to anchor them into your memory.

When I work with kids in school nowadays as a coach I always get them into a positive and confident state first as it aids learning and let's the whole experience feel more relaxed and enjoyable.

I also think getting kids into a really positive state first is really important for you as parents to remember to do at home before helping your kids with their homework or their spellings as it creates the mood of success.

Get your child to sit down and relax and breathe deeply and slowly and to shut their eyes and to remember a time when they found something really easy to learn , really easy to remember and really enjoyable as it was all so easy. Ask them to see what they were doing ' hear what they were hearing inside their heads and to feel how good they were feeling and to give those pictures, sounds and feelings a lovely colour. Let that lovely colour spin through their bodies from the tips of their toes to the tops of their heads round and round faster and faster and ask them to smile and say "yessss...." and get them to clench their hand into a fist.

Then ask them to imagine feeling like this when they are learning something new - to relax and to breathe deeply and to imagine learning their spellings easily and effortlessly without any effort ' without any struggle knowing that they have learnt a really easy strategy for remembering their spellings magically now.

And get them to open their eyes.

Spelling is a visual skill and excellent spellers always go through the same strategy so by learning the steps and following what excellent spellers do your child is going to learn to spell new words easily too.

Magical Spelling Made Easy

Get some paper and break the word up into blocks of 3 or 4 letters with each block being a different colour and slightly spaced apart. Let's practise with a difficult word to prove it too you !

Chry san the mum

Show only one block of letters at a time and cover the others up.

Now stand behind your child and hold the piece of paper up high to the left with those 3 or 4 letters and then move the paper down to the right and up to the left again asking them to move their eyes up and down just relaxing and looking at the colourful letters. (I do this by pointing whilst saying "now look up here") Your child can do this for themselves once they've got the idea

Get them to make the letters bigger in their imagination or brighter or flashing on and off

Say the letters out loud

Ask them to close their eyes and to really see the letters in colour down to their right and to check that they feel right and then write them in the air using their finger

Do this 3 times on each group of letters and move through the other colour groups.

Then get your child to see the whole word and place it again up to the left and down to the right.

Then ask them the magic question: Spell the word '

Now spell it backwards - what are the three letters in the middle, at the end, (or any other combination.)

If they can't do it, or falter over a block, get them to do the process again, only emphasise that they do not need to work at it, they only need to relax and use their eyes and look.

This strategy works because you are asking them to place the letters in a place where they visually remember, using NLP's eye accessing cues. They can easily recall the picture of the word that they have placed in their visual memory.

(Neuro Linguistic Programming is an ever-growing collection of information, insights and mental techniques that can enable people and children to improve how they think, behave and feel.)

This works by going from up left to down right however, some children, (and adults), place the other way so to check where your child visually constructs ask them a visual question and watch their eyes. i.e. do we have a shed in our garden? Where in the garden is it? This tells you which side their visual memory is on.

I used this spelling strategy with a group of dyslexic children and their confidence really soared as we had such fun with it. It builds capability rather than just short term memory.

By teaching your children how to learn to spell you are really helping to improve their learning strategies in general and giving them the gift of independent inner learning for life.

This technique motivates and empowers your kids so what better gift can you give them?

Enjoy exploring and have loads of fun learning lots of new words.
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About Author
Both Roger Cox & Sue Atkins are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Roger Cox has sinced written about articles on various topics from Finances, Investments and Finances. Roger Cox, born in New Zealand, was President of a large international freight company in Los Angeles before starting his own consulting firm. Roger has been successfully trading stock options for 4 years and teaches others how to do the same at. Roger Cox's top article generates over 2900 views. to your Favourites.

Sue Atkins has sinced written about articles on various topics from Family, Self Esteem and Family Concerns. Sue Atkins is a Master NLP Practitioner and Trainer and a former Deputy Head and mother of two teenage children. She has written many books on self esteem, toddlers and teenagers and has a collection of Parenting Made Easy Toolkits available from her webs. Sue Atkins's top article generates over 18100 views. to your Favourites.
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