Protect Your Stocks Using Put Options

Posted by admin as shares and stocks

Hoping and praying that the stocks that you just bought will go up is not the best strategy to use, however it is the one very often used by the average Joe stock trader who is stock trading internet. The only good point they have is that in bull markets most stocks will go up.

Statistics show that in a bull market about 75% of the stocks will follow the general trend and go up, and in a bear market 75% will also go down. Trading with the trend is the best way to trade as 9 out of 12 stocks will follow the trend and give you the best chance of making gains on your stock purchases.

But what if you own some good stocks and don’t want to sell when the market is clearly going down, or about to go down?. There are a couple of tactics that you can consider, both of which involve the use of options, CALL options and PUT options. There is the widely known strategy called Covered Calls, and the much lesser known one called the Married Put.

If you are going to trade options it is essential that before you start trading you get the best option trading education that you can. You should also practice stock trading until you are comfortable with the process. This is a very important point that must be taken seriously, if you don’t understand the terminology and the theory then you should not be trading options. If Put option, Call option, Married Put and Covered Call are new to you then don’t trade until you have studied sufficiently.

Selling calls against your stock in 100 share increments is the basis of the covered call strategy and it can provide about a 2-7% buffer against the loss in stock price. However a bigger drop in stock price will not be compensated for using the covered call strategy, in general.

Stocks in a bear market, and even in a bull market, can drop quickly on news or earnings releases, as much as 15 to 40% within a month. Using covered calls to protect your stocks will only provide limited protection of less than 7% at best and so will not save you if the stock takes a 40% tumble.

The better solution to providing down-side stock protection is the option strategy called the Married Put. As the name suggests the PUT that you buy is used to provide protection when the stock goes down because Put options increase in value when the stock decreases in value. The term married is used because the option that is selected has to be very compatible with the stock, in other words a good match, if the strategy is to work.

The selection of the best Put option is not straight forward and involves several criteria which are listed below:

1. The strike price of the option

2. The current stock price

3. Choice of options, in or out of the money

4. Put expiration time

Even though the married Put protection only has a short life span if offers much more protection than the covered call. It can provide as much as 95% loss recovery in the event of a significant drop in the stock price.

The downside of the good protection is that you have buy the Put which is a debit whereas the covered call is a credit. But there are ways of offsetting this expense and there is much more to this strategy when executed correctly. The Married Put can be made to pay for itself and used to generate very good gains if the market, or stock to be specific, moves a lot.

The general idea of the Collar Trade is to combine the covered call and married Put strategy into one, this is what is called the Collar Trade. In effect you put a collar around the stock, sell a call and buy a PUT. If you do this correctly most of the cost of the Put can be offset by the credit from the covered call so you can protect your valuable stock at almost no cost. Yes this is a great strategy which the general public is unfortunately very ignorant of, and most brokers don’t understand.

The strategy that I have outlined above is unknown to the average stock market trader but is one of the best trading systems you could have.

Technorati Tags: bear market, calls, day trading, Options, puts, stock market, stocks, trading, trading education

Securities Fraud

Posted by admin as shares and stocks

Have you suffered from stock broker investment losses or fraud?

 

Legal recovery of investment losses from protected notes.

 

A class action lawsuit has been filed for people who acquired Lehman Principal Protection Notes from UBS Monetary Services Inc., and other companies. The class action lawsuit alleges that defendants deceived investors as to the hazards of investing in the Notes and that UBS and other corporations offered and sold the Notes as suitable for investors seeking to protect their complete principal investment from investment losses. Following Lehman Brothers bankruptcy filing, Lehman Principal Protection Notes went into default, causing the holders of these Notes to become senior unsecured creditors in Lehman’s bankruptcy proceeding. These stockholders will lose all or significantly all of their principal investments unless they file a litigation claim for their investment losses.

 

You may bounce back from investment losses in structured investments that were marketed as 100 % principal protected.

 

Gilman and Pastor is at present looking into consumer complaints that certain brokerage firms, financial institutions and entities misled their clients into buying a hundred p.c principal protected notes, through assurances that their principal investment would be fully protected. Certain brokerage firms including UBS, Raymond James, Merrill Lynch, JP Morgan, Fidelity, and Wachovia, marketed and are alleged to have sold principal protected notes to their clients, specifically targeting conservative, anti-risk stockholders who were seeking to preserve their capital and generate income. In fact, these notes subjected financiers to significantly more risk than was disclosed and, following Lehman Brothers’ bankruptcy filing and other finance events in Sep , holders of these principal protected notes faced losses, in a few cases, of their entire principal investment due to fraud.

 

Why Gilman and Pastor, LLP for your Investment Losses?

Gilman and Pastor are class action lawyers and a national litigation firm specializing in securities litigation, investment losses, investment crime, consumer class actions and complex business litigation. For 30 years our attorneys have recovered more than a billion bucks for our clients for investment losses.

Class action lawyers at Gilman and Pastor LLP publishes a Class Action Legal action Against AIG and Merrill Lynch, As Well As further Inquiries of Structured Investments.

 

The countrywide legal company of Gilman and Pastor LLP with offices in Boston, Massachusetts, and Naples, Florida, claims that a class action lawsuit has been brought for people who acquired Structured Notes from AIG and Merrill Lynch. Fiscal crime is running at epidemic proportions. The newest wave of the purported highly fake investments is “structured investments”. The complaint alleges that brokerage firms and financial institutions aggressively marketed structured investments as being structured promissory observes that have complete principal protection, as contrasted to other instruments like equity-backed mutual funds that don’t provide principal protection.

 

Such structured notes subjected stockholders to noticeably more risk than could have been divulged. Holders of these supposedly principal protected notes face losses, in a few cases, of their whole principal investments. Gilman and Pastor LLP is finding that many financiers haven’t been mindful of their money plights since their financial statements generally do not reflect current value but only alleged value at maturity. Moreover, holders of these investments are unfortunately learning that most of the investments are illiquid, leaving holders without a remedy except filing a litigation claim.

 

Gilman and Pastor LLP is looking into over thirty 30 structured note issuers and more than forty banks who have issued or sold structured offerings. These include:

 

ABN AMBO Bank N.V.

AIG

Bank of America

Barclays Bank

Bear Stearns

Charles Schwab

Citigroup

Countrywide Securities

Credit Suisse

Deutsche Bank

E-Trade

Harris National Association

Incapital LLC

JP Morgan Chase

Lehman Brothers

Merrill Lynch

Morgan Keegan

Morgan Stanley

RBC Royal Bank

Societe Generale

Sun Trust Bank

UBS

Wachovia Corporation

 

The structured investments were usually offered and sold as OK for stockholders looking to protect their whole principal investment. Each of the issuers and sellers purportedly offered and emphasized the protection of principal as a chief

objective when investors are now learning they may be at risk for losing nearly all of their investment. Investors should act fast to guard their interests.

 

For almost thirty years, class action lawyers, Gilman and Pastor LLP has been one of the nation’s leading firms representing backers in securities fraud actions and litigation to correct egregious corporate practices and breaks of fiduciary duty to investment losses that exceed $100,000.

 

Technorati Tags: attorneys, class action lawyer, investment losses, securities fraud

Learning Options Trading

Posted by admin as shares and stocks

If you are a stock market investor you would know that buying a stock for a particular company entitles you as the investor partial ownership in the corporate entity that issues the shares. To put it another way you are purchasing an “equity” participation in the company.

You will find that the best part of the US stocks listed and traded in the stock exchanges are known as equity securities. Trading in stocks is pretty simple. You make your selection, buy the stock at the listed price and then sell it if the value increases if you choose to do so. You can also earn dividends from the company while you hold a stock.

This article is about helping you with Learning Options Trading. Time to learn just what they are? To make it simple, an option is really just a contract.

The difference with a stock and a stock option contract is that the purchaser of a stock option is that they do not take ownership of anything. An option contract makes it so the owner has the right to buy or sell the underlying financial instrument on which it is based.

The type of options most commonly referred to in financial circles is known as “equity options”. You may be interested to know there are different expiration dates for the options. The “regular” options can have expiration dates up to 9 months from the time of issue. There are also options known as LEAPS. This type can have an expiration date of up to three years.

Now lets dive into a bit more detail about an option contract. Equity options just like stock are classified as securities. To get more specific equity options are called “derivative” securities. If you don’t know what that means it is simply that the value is in part based on, or derived from, the value of the particular underlying stocks.

You will find that as equity options are classed as securities they are able to be traded on any of the exchanges in the US that list equity options. You will be pleased to know that like the stock market, exchange listed equity options are overseen by the Securities and Exchange Commission (SEC).

Technorati Tags: learning options trading, options trading, stock trading

Stock Trading Online - What You Must Know

Posted by admin as shares and stocks

The process of stock trading has of course evolved a lot over the years as technology as developed. In the early part of the 20th century you had to physically visit a stock brokers office or trading room to buy and sell stocks.

When the postal mail became into common use you could then buy and sell stocks by mailing a letter to your broker, of course today nobody would dream of doing either of these.

Today the most used method of trading is either using the telephone or stock trading online. When using the telephone to trade stocks you can still do it by speaking to a broker and giving them your clear instructions, or you can do it all yourself by using some form of menu system using the digital key pad.

But by far the most common form of trading is done online, so what do you need to know about stock trading online?, more than you may think!

Here are some points that you may not have considered:

1. Virtually every broker can do stock trading but what about options, Forex and futures?. While you may not be interested in trading either Forex or futures it is quite likely that at some time you will want to trade options online, even if it is just covered calls. Make sure that your chosen broker allows you to trade all the markets that you want to.

2. Of course the fee’s charged by your online broker is an obvious point to check, the fee’s can vary a lot and if you are doing hundreds or thousands of trades a day it can add up to quite a lot of money. Did you know that you can just call up your online broker and ask for a reduced commission charge?, yes you can, I’ve done it. Of course they don’t advertise it but if you do a lot of trades they will want to keep your business.

3. Have you planned what you will do if you are in a trade and your internet connection goes down for any reason, it could be a power failure, problems with the internet or your PC crashing?. If you are day trading you will want to telephone your broker and manage your trade, probably you will just want to close it. How will your broker deal with your call, will they answer quickly, will they look at charts for you and describe what is going on?. Make sure that your broker has good telephone support.

4. Are your trading accounts safe?, make sure that your broker is a member of SIPC, the Securities Investor Protection Corporation, which protects against losses caused by the financial failure of the broker-dealer, but not against losses resulting from depreciation in a security’s value. Usually accounts are protected by the Securities Investor Protection Corporation (SIPC), up to $500,000 (including up to $100,000 for cash claims).

Whatever you decide to do, before trading stocks, options or anything else make sure that you get a good trading education by reading the best trading books that you can.

Technorati Tags: brokers, Options, stock trading, stock trading online, stocks, trading

How Important Is A Forex Coaching Program?

Posted by admin as shares and stocks

Many people just want to enter the forex trading market after hearing about success stories and they can easily end up losing their shirts and more. How important is it to go through some training before entering the forex market?

THE AUTOMATED SYSTEMS

If you are planning to enter the forex trading market, there is no doubt that you will carry out some research on the internet. There you will hit upon sites which promise you fantastic gains using their automated forex trading systems. You can either the download the software or have your account with them and they will give it to you – all this comes at a price, of course. These systems virtually guarantee you automated trades which will earn you money, while you do other things. Now, just think, if these systems were so good that they could scalp the market and earn money for you, why would people waste time, money and effort on learning about forex trading – they would just use a system. Beware, some of these are just scams which will take your money for the system and never work the way they are supposed to.

REAL TRAINING

Real forex training, real coaching, whether it is on a personal basis or online, will always be of help. It will assist you and add to your knowledge and allow you to make decisions, after doing due diligence, of course. You will be able to do currency trades in pairs and develop your own strategies for trading. This will come from training and from experience. You need to have forex coaching like Triad Trading Formula to understand how the market works, what are the dynamics that drive the market, the repercussions of politics, how banks impact foreign currency prices and more. Even if you have to pay to get the training, it will be money well invested because it will a) help you minimize your losses in the market and b) it will help you make money. You need to be able to understand statistical data analyses and various wave theories as well.

DEMO ACCOUNTS

Many sites offer you demo accounts which you can try out till you are familiar with the whole system, without using real money. Once you understand the basics, once you are able to trade successfully with the demo accounts and software, you will be in a position to start trading in a forex account for real. When you use a demo account, do a lot of homework before and after, even though it is pretend trading. The before is important to see what you want to do, which currency trades will give you more money, how quickly you should cut off your positions whether they are losing or winning ones and also how much time you want to spend doing this forex trading. The after is necessary to analyze what you did right and what you did wrong. If you are following a person or site’s recommendations, you can also see how many times they picked successful trades.

REAL TRADING

Once you have had some training and opened an account, got your trading software in place, and familiarized yourself with it, put in your seed money, you will be ready to start trading for real. You can use an automated system, but you should use it as an assistant only, and make the decisions on your own. In the beginning, you must start with small amounts of money. If you make a profit in your trades, you should remove the initial capital as soon as possible and play with your profits alone - this way you’ll be playing with the market’s money and not your own and your capital will be protected. It is only with experience that you can understand how to make profits and learn which kinds of trades work for you. Remember that the forex trading market is open 24/7; you can trade whenever you have time to do so. You should start with money you can afford to lose and not get taken by any get-rich-quick schemes. And you should set aside the money you want to put in the forex market without impacting your necessary expenditures and living expenses. It is extremely easy to get obsessed by the market and lose track of reality once you are in the market.

Technorati Tags: forex coaching programs, triad trading formula

Forex Megadroid Can Possibly Make You A Million

Posted by admin as shares and stocks

There is new forex robot in the market that is creating a lot of buzz. Forex MegaDroid was recently released. It is being called a new revolutionary forex robot. It is breaking old barriers. This is the new frontier in forex trading. Forex trading is never going to be the same again.

Forex MegaDroid is based on a totally new technology called RCTPA. We dont know what this technology is. The only thing that we have been told is that RCTPA is Artificial Intelligence Technology that sees in the immediate future something like 2-4 hours. This means that Forex MegaDroid can see in the future and adjust itself 2-4 before the market changes to new stimuli.

Forex robots are programmed according to past historical markets. But we all know, past is past. It never repeats itself. Past conditions can never accurately predict future markets.

Forex markets are always reacting to changed economic and political conditions. So, one particular market condition cannot last long. The markets keep on changing.

John Grace and Albert Perrie are two forex professionals that have been working in the interbank market for the last 4 decades. They are the real professionals. They know the inside and out of forex markets.

RCTPA technology was developed by them. It sees ahead as I had told you. This is a new frontier in forex trading. Old barriers have been broken. Forex trading is about to change forever. RCTPA has been used in Forex MegaDroid. Other programmers simply dont know what is RCTPA.

Forex MegaDroid has a record of consistently doubling your account every month. This is no hype. Now, what I want to tell you is this that this robot has the potential of making you more than $1 Million in less than one years.

Start with only $500. Every month double your account. Do the calculation: $1000, $2000, $4000, $8000, $16000, $32000, $64000, $128000, $256000, $512000, $1024000. In only 11 months, you have reached $1 Million.

A better way would be to use two robots. This will hedge your risk. If one loses, the chances are the other will give you a winning trade. Forex MegaDroid and FAPTurbo are two forex robots that have a very good consistent trading record.

Get a 20% discount off Forex Megadroid.

 

Technorati Tags: buy forex megadroid, forex megadroid, forex megadroid robot, forex trading

Make Money Online Trading

Posted by admin as shares and stocks

No doubt for many investors and traders the idea of being able to make money online trading is appealing. New Internet technology has opened up the world to those who have an interest in investing and speculative trading. As technology has advanced so has the number of online brokerage firms that offer  with the opening of trading accounts the use of free trading platforms and services that just a few years ago would have cost hundreds, even thousands, a month in data access fees.

The online trading services offered extend across virtually all markets including stocks, foreign exchange or forex as it is known, and commodities. The potential is there for you as a trader to learn about and trade in any of these markets, all the while sitting in front of your computer at home. With a good fast Internet connection your home might be located just about anywhere in the world.

Learn more about how to Make Money Trading Online

Having such readily available trading assets at your disposal, however, presents a danger to your financial health. Many traders do learn how to make money online trading. Many others, unfortunately, get caught up in the excitement of trading and try to make money without knowing very much about the markets that they are trying to trade in. Unless you are extremely lucky this would be a mistake. 

Those who consistently make money from online trading do so because they have developed an education and skill sets within their chosen markets as well as the discipline to follow well thought out trading plans. They also have true risk capital at their disposal and can trade knowing that if things don’t work out as planned the loss of their trading capital would not impact the way that they live in the least.

So it is possible that you can you make money trading online? Well, perhaps you can, if you first educate yourself about your markets. Just be sure to know what you are doing before trading with real money. Opening a free demo trading account is a smart way to get started no matter if your interest is in stocks, forex, or commodities.

Learn more about how to Make Money Trading Online

 

Technorati Tags: make money trading online, trading commodities online, trading forex online, trading stocks online

Money Philosophy’s Penny Stock Picks

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In February Money Philosophy thought it would be a good time to get back into the stock picking game after having been out of it for a few years. He was immediately drawn to stocks such as C & GM which had taken a huge hit since the stock market fell through the floor in September of 2008. These stocks looked like they were rebounding and he was thrilled about the possibility that they may eventually reach their 52 week highs.

The GM and C picks were extremely successful and that got him interested in looking for other stocks similar to them. He ended up coming across a couple of penny stocks, LJPC and CTIC, that looked like they may break through in a similar way. These stocks looked like bigger risks but they also seemed to have even greater potential for reward.

That ended up being the case as both CTIC and LJPC ended up being huge winners. They were even bigger winners than GM & C.

He thought that he may really be onto something with the way he was selecting these stock picks so he decided to try and make a stock screen screen which would find more stock picks like them right at the moment before they were about to “pop” with big gains.

The reason I’m writing this blog post right now is because his first stock pick with this new screen reached a high 40% above it’s open today and that certainly impressed the heck out of me. Obviously my imagination is off and running with the huge gains I could make by following his advice.

I definitely don’t expect every stock pick he or anyone else makes to have this kind of gain. That’s impossible. It’s also key to remember that a gain isn’t “official” until you actually sell the stock. Deciding when to get out is equally as important as deciding when to get in. The really cool thing is that he also makes a post on his blog (and on Twitter) when he sells his holdings.

He does not share the precise way he screens for these penny stocks as I guess he’s too selfish to share all of his trading secrets but he definitely shares more about what he’s actually doing on the market than most so called “gurus.”

He does not suggest that anyone trade his penny stock picks. There’s actually nothing to gain from that.

While I understand wanting to sign up for The Day Trading Robot or The Forex Autopilot System, I honestly think I’ll have better gains just by doing what he’s doing. And the really awesome thing is that it’s completely free.

Consider this: It’s definitely a good idea to “trade on paper” before you start making trades with real money when starting up a new strategy.

Technorati Tags: investing, Making Money, penny stocks, Personal Finances, stocks, trading

Having Dinner In New York With My Old Friend, Mr. Ron Pollack

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 I met with representatives of am institution that was considering investing in my new hedge fund on a recent visit to New York. Following the meeting, I met up with an old acquaintance, whom I will mention as “Harry”, for supper. Stocks

 

Harry has a Sales Trader job, which is a person who handles the order for institutional clients such as hedge funds and mutual funds. I was one of his accounts, in my “Ron Pollack Bulldog Days”,he had an extremely successful career, and used to cover me. He retired or took a break from trading around the same time I did in 2004, but we continued to stay in touch with one another. Hedge Fund

 

Both Harry and I had varying, though generally little, success with business ventures after our time on Wall Street. After a while, Harry started to miss the game and asked me if I’d ever go back to trading. Really, I miss it also. When I told him in early 2008 that I was going to return to managing money, he was thrilled and couldn’t wait to get back into it as well. Brokerage Firm

 

I had to suspend the start of my new fund because of the market’s gyrations late last year. its surprise for me that  a always happy  and hard working man,harry ,handle million share orders in volatile stocks  looked like a depress person. Firms were disappearing left and right, and my account that he had been counting on for his own return, was not there either.

 

Shortly after my visit with Harry, I met a man I’ll call “Doug,” the head of a small brokerage with hedge funds as clients. Right away Harry can time mind and I put the 2 of them together. It worked out since Doug offered Harry a trial run, and of course Harry aced it. Within his first few phone calls to some old accounts he snagged a big order and it went up from there.

 

Harry has become one of the top producers for Doug and he has only been on the job for four months. It wasn’t surprising that Harry was beaming when we met him for dinner. He’s making money, good money and having a blast. I was really happy. In fact he said, “Ron Pollack I am going to treat you every time you come to NYC,then Harry announced that dinner would be his treat.I was very pleased as we were at a great location, one of the city’s best steakhouses.

 

Toward the end of the evening, I asked Harry this question, “Every day we’ve been hearing stories of doom and gloom like the end of Wall Street, the end of hedge funds, the end of the world as we know it. Obviously things are messed up but I’d like your perspective on all of that changed in light of your recent success.Ron, there are a lot of people hurting right now and I truly feel for them, but I am living proof that if you’re good at what you do, have the willingness to work hard and apply yourself and are realistic in your expectations, you can make it and even flourish in times like these,His answer was refreshing and went something like this, he said. Although I’m not making as much as I used to, I cannot say I have anything to complain about.  we’re survivors and there’s business to be done.

If you are productive, someone will always be willing to do business with you.Here’s to my friend Harry! Continue to show us how to achieve it. Ron Pollack, signing off for now.

Technorati Tags: Brokerage Firm, Business Adventure, Hedge Fund, NYC, stocks, Wall Street

How Beginners Can Determine Their Stock Market Investing Risk Tolerance

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Risk tolerance is critical for the stock market for beginners crowd. When you first study how to invest in the stock market, you’ll discover that each person has a risk tolerance that should be understood thoroughly. Any reliable and professional financial planner or stock broker should understand this so he can assist you with finding out what your risk tolerance might be. Then, that person should assist you by researching which investment vehicles fit your risk level.

It’s a commonly believed misconception that your emotions are the only factor to take into account when assessing risk tolerance. That’s not the case at all. Several things have to be considered when deciding what your risk tolerance level is, and gauging your emotional response is only a small part of it.

Ascertaining your own risk tolerance, with regards to strong stock market investing basics, requires awareness of multiple factors. One of those factors being that you know how much investment capital you have available, and the other is that you are totally aware of the financial goals you’re trying to achieve. As an illustration, if you plan to take retirement in 12 years and you haven’t even started saving for retirement yet, you will need to sustain a high risk tolerance and do some aggressive investing to reach your financial goals by the time you want to retire.

But, if you begin investing for your retirement in your early twenties, your stock market investing risk tolerance will be low. Developing the saving habit early will allow you to let your money grow over time. When you factor this in with your emotional response to financial risk, the right investment formula will become obvious. It’s hard to ascertain this for yourself, so experts recommend that people use a knowledgeable professional who can help you determine the risk tolerance you’re comfortable with, and help you select your investment opportunities accordingly.

Knowing your risk tolerance will help you establish an investment style and help you feel confident when you and your broker make investment decisions. Even though there are many investment types, only three investment styles exist – and those styles sync up with your personal risk tolerance. Those three styles are called aggressive, moderate and conservative. But I will cover those in another article!

Technorati Tags: beginner stock market investing, investing, online stock market investing, stock market, stock market investing, stock market investing advice