DaytradeTeam Brainzzzz

SNDK Screaming for Another Strangle Spread

2006-01-03T13:00:00.000-05:00

Back on December 12th, I told you that SNDK was poised for a big move in one direction or another, and that the best way to profit form that was to use a straddle or strangle options spread. Well, since then the stock has moved up $17/share and has made some really great options trading profits for those that listened.

Now we find ourselves in a very similar situation as SNDK tests 52 week highs today and looks poised for yet another breakout in one direction or another:

Notice how SNDK is now challenging its old high. A penetration and close above 66.00 would indicate further movement to the upside and a nice breakout pattern. On the other hand, if SNDK pulls back here, it will form a bearish double-top formation. In either case, it is very likely that SNDK will move big over the next month or so, and owners of strangle options will likely make a handsome profit.

For strangle options, I always like to go at least 3 months out with strikes that produce a net debit of under $1.00 for the put and call combined.

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Stock Trading Tip: Sell Into "Lonely" Gaps

2005-12-19T16:12:00.000-05:00

I'd like to share with you one of my favorite stock trading tips: Sell positions and lock in profits on "lonely gaps".

I know what you're thinking, "Andy, what the heck are you talking about? What is a lonely gap? Sounds like something you made up."

Well, yes--I did make up the term "lonely gap." See, a gap open occurs when a stock opens at a price significantly different than it closed at on the previous trading day, leaving a space (gap) when you look at the chart. A lonely gap occurs when the stock is gapping up without the help of the overall market. In other words, the stock is gapping up all by itself and without the conviction of the broader market to sustain the move (note that this is best used on stocks that do not have MAJOR news events driving the gap.)

For an example, let's take a look at the trade of FLEX that we just exited for a nice profit on Monday in our Small Cap Swing Trading System:

On the chart, you'll notice that on Monday morning, FLEX opened significantly higher than it closed last Friday, creating a gap up on the chart. In addition, this was a lonely gap, because the Nasdaq and SP broader markets were only slightly higher at the open and starting to sell off just a few minutes into the trading day.

This made us hit the sell button very quickly. We locked in a profit of almost 5% in just a few days, with the bulk of the gains coming on the overnight move. After selling, we watched with pride as the stock fell 30 cents through the day to close at 10.85, happy that we took the gift given to us by the lonely gap.

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Options Trading Alert: SNDK Could Have More Downside

2005-12-12T10:07:00.000-05:00

SNDK has had a heck of a year, running from near $20/share all the way up to 65 in a little less than 11 months time as it rallied along with AAPL and other utilizers of flash memory technology. Of course the big run is over now, and the stock has pulled back to around $50 after a couple of downgrades and a natural end to the massive short-squeeze that took place on the stock.

Unfortunately for SNDK shareholders, there are signs that this may be more than "just a pullback", and that SNDK may have another large move to the downside in its future.

Looking at the one year chart of SNDK, you can see the big run the stock had after its initial breakaway gap above 24 this summer. You can also see that SNDK may be in the final stages of completing a head and shoulders formation--typically indicating a reversal in trend and potentially spelling bad news for the stock.

The "neckline" for SNDK's formation is right around $45.50/share. If SNDK can hold above this price and eventually make a new high, the bullish patterns continue. On the other hand (more likely), if SNDK falls through $45.50 on decent volume, the neckline will be broken. This price action would confirm the head and shoulder reversal and indicate a strong likelihood of a new downtrend emerging for the stock.

One of the best ways to play unconfirmed head and shoulder reversals is through the use of straddle or strangle options spreads as the stock approaches the neckline. By entering both a put and a call option at the same time, you profit from a large move in either direction--which is extremely likely if SNDK starts to test the $45.50 neckline.

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Options Trading Alert: AAPL Uptrend is Solid

2005-12-08T21:39:00.000-05:00

AAPL is showing some signs of slowing down, but the uptrend on the stock is still very much in tact here. In fact, this "breather" could be a real opportunity for alert options traders who are looking to cash in on the time premium decay in AAPL put options over the next week into the DEC expiration.

First, let's take a look at AAPL's 20 day chart so that you can see exactly what I mean:

Notice how the stock has continually bounced off of the uptrending line over the past month or so, and despite the market weakness of the past week (and AAPL's own troubles), AAPL is still significantly above the uptrend line.

Here's how we will be looking to play AAPL options over the next couple of days:

Look for low volume dips of $1.00 or more in AAPL stock price and spikes in the put option premiums. Sell the puts into this price spike and establish a bullish vertical credit spread or even leg into an iron condor or butterfly option spread position.

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"Extreme Potential" OptionsTrading Alert on RIMM Pending

2005-11-21T22:48:00.000-05:00

RIMM has been in the news a lot lately, with its patent lawsuit dominating the headlines. Volatility has been huge over the last few weeks-- and I have a feeling the party has just begun.

When looking at the one year chart of stock trading on RIMM, the first thing I notice is a head and shoulders reversal pattern that has just been confirmed with Monday's close near $67.50. The other thing I notice is the relative weakness of RIMM to the Nasdaq Composite index over the past 52 weeks, most likely a result of investor angst and focus on the courtroom proceedings:

OK, from looking at the one year chart on RIMM I'm convinced from a technical standpoint that RIMM will be moving higher from here. On top of that, I also know that RIMM has about 14.5 million shares of its float sold short--about three full days worth of average volume, which means this stock could get a very nice day trading short squeeze on any good news for the company. In fact, I'm going to set a two-month price target of $92.00 per share on RIMM--which is approximately the price it would be at had it simply matched the performance of the Nasdaq over the past year.

So what will I be alerting DaytradeTeam members to do on RIMM Tuesday?

Well, as most of you know, I really hate risking a penny more than necessary on a position. With RIMM shareholders waiting on pins and needles for the whim of a judge to be passed down, it would be a big mistake to buy RIMM stock and risk a full $67.50 per share, so I'll be looking for limited-risk, bullish opportunities on RIMM options trading instead.

Tuesday morning I'll be analyzing the options chains on RIMM and looking to alert members to either one of these two positions:

A Bullish Vertical Credit Spread that profits as long as RIMM stays above $60/share for the next month (and only risks $3.40 in the process)
A Directional Call Trade that buys either the 80 or 85 call options for the March or Jun 2006 expirations. These positions would likely produce a gain of $6-$9/contract in the event that RIMM does get a short-squeeze higher, but only lose $1.50-$2.00/contract in the event that RIMM completely falls apart to new lows.

This is the way that I love to trade "home run plays"--use technical analysis to put the odds in your favor, and common sense to severely limit losses in the event things don't go your way.

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Look for Sale Prices on MSFT and Go Bullish

2005-11-15T22:10:00.000-05:00

Microsoft has finally taken the gloves off. A renewed energy has apparently swept through the company, and through Wall Street. A plan to destroy Google is in the works, they are entering the supercomputer market, and their XBOX 360 unit is likely to be one of the "must have" gifts for Christmas this year as it beats Sony's Playstation 3 to the shelves.

Even better, the stock is looking very strong, nearing three-year highs and continuing one of the more "stealth" uptrends I've ever seen. Take a look at the three-year chart of MSFT to see what I mean (click to enlarge):

Notice how MSFT has moved steadily (and yes, very very slowly) higher over the last few years, making higher lows throughout the period and putting some very impressive high-volume rallies together in the process. Currently, MSFT is running right up against its three-year high on a month-long rally (highlighted in yellow) that is both impressive and unsustainable at the same time.

A pullback in MSFT is almost certain here, and that is exactly what we want to see. My Stock Trading and Options Trading Systems will be watching very closely for low-volume pullbacks over the next month to enter bullish positions on.

After all, what could be better than a company with a renewed "start-up" spirit, a genius staff, an uptrending chart and 40 billion dollars in the bank?

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Options Trading Alert: SIRI Breakout Near

2005-11-08T23:29:00.000-05:00

SIRI has had a very nice run over the last couple of weeks before hitting a wall of resistance at 7.00. The stock has formed a sideways trend channel from 6.80-7.00, and we are watching very closely for a break of this consolidation area:

Once SIRI breaks out of this consolidation area in either direction tomorrow (as highlighted in yellow), we will analyze the validity of the break by looking at both functional indicators and volume to determine if in fact the move is a signal of SIRI's next large move.

At that point, we will likely issue a new options trading alert on SIRI to our members, most likely a directional put or call position with 150-200% target profit, although we could also issue a vertical credit spread alert that will profit from time decay over the next 10 days for the November expiration if we feel the move might be more subdued.

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Uptrend Trumps Earnings for Big Profits on AAPL Call Options

2005-11-02T22:17:00.000-05:00

Sometimes the simplest reasons for a trade are the most profitable. Our Directional Puts and Calls Options Trading System signaled an option trade when we spotted a strong uptrend pattern in AAPL.

An uptrend is defined as a continued pattern of higher highs and higher lows in a stock price chart. This is exactly what we saw when we signaled the DaytradeTeam members to buy the Jan06 55 AAPL calls for $4.40 per contract on Oct 5th, 2005.

Let’s take a look at the chart of AAPL:

As you can see, when we entered the trade (first yellow circle) there was a strong uptrend in progress. About a week later, AAPL released disappointing earnings.

Our nerves were tested as the stock dropped several points on the bad news. We knew, however, that a strong uptrend is often more powerful than a simple earnings release, so we held and advised our members to do the same on this option trade.

In fact, if you've been a reader of the DaytradeTeam Stock Trading Blog for long, you will recall that we also posted an alert to you that AAPL's earnings gap down might be a solid opportunity to get in cheap!

Within days the uptrend pattern was resumed and AAPL was on its way back up the chart to new highs.

After a strong push on Nov 2nd, we found AAPL at the top of its uptrend channel—a great place to take profits. DaytradeTeam then issued a sell signal to its members and the average exit price was $7.50 per contract—a nice 70% gain in less than a month.

Options Tip: BEXP Call Options Very Active

2005-11-01T22:12:00.000-05:00

BEXP had massive call option activity today after the Wall Street Journal mentioned that it might be a takeover target, even pushing implied volatility up to 76, well above its normal range:

Notice how the stock has extended its uptrend into new highs on increasing volume--a very bullish sign for a stock trade. We would look for opportunities to enter vertical credit spreads such as an "in the money" bull put spread on BEXP, so that you can profit from both time premium decay and the upward movement of the stock.

We will be monitoring BEXP very closely over the next few days for the best possible entry point. If you haven't tried DaytradeTeam yet, be sure to start a trial membership right now so that you are alerted in real time when we see big profit opportunities in option trading!

Diagonal Call Options Spread

2005-10-31T19:42:00.000-05:00

A Diagonal Call Spread is basically a way of doing a covered call position without using as much buying power. Instead of buying stock, you buy long term call options that are deep in the money.

Here are the basic steps to establishing and getting out of a diagonal call position for maximum profit:

Find a stock that you believe will move higher in the near future. When using this options trading strategy, we suggest using a stock that is in a confirmed uptend.
Buy a call option that is well in the money and at least 5 months from its options
expiration.
Sell a call option with a higher strike price (ideally out of the money) that expires within the next 45 days.

Hopefully, the stock will continue its uptrend pattern, causing the lower strike price option that you own to increase in value, but will stay under the higher strike price so that you simply take the income from the sold position and sell another high strike price option again the following month.

Diangonal Call Options Spreads are ideal for income production within your portfolio because they profit from time premium decay while utilizing less buying power from your account than traditional covered call options spreads.

Option Trading is about making profits and putting the odds in your favor. Learn from experts as you trade with a DaytradeTeam membership--start a trial right now!

Options Trading Term: Expiration

2005-10-30T22:30:00.000-05:00

Expiration date in options trading is defined as "The day on which an options contract is no longer valid and, therefore, ceases to exist."

Notes:

The expiration date for all listed stock options in the U.S. is the third Friday of the expiration month (except when it falls on a holiday, in which case it is on Thursday). For example, if you are looking at the November options on a stock, you should realize that they will expire on November 18, because that is the third Friday of November.

Typically, Option Trading is most profitable when you establish net-debit positions such as single call options or put options or straddles and strangles that have expiration dates 4+ months away from the current date. You should also try to establish net-credit positions such as iron condors and vertical credit spreads that expire within 40 or so days.

The Max Pain theory holds that options expiration dates effect the stock price of the underlying security.

Strike Price in Options Trading

2005-10-27T23:01:00.000-04:00

The Strike Price of an option is the the specific price of an option contract at which the contract may be exercised and is typically available in 2.50 or 5.00 increments. For example, if someone is talking about the JUN 35 call options on QQQQ, they are talking about the QQQQ call options that expire in June with a strike price of 35.00.

This strike price is the price where the holder of a call option buyer can buy the underlying stock or a put option buyer can sell the underlying stock.

So naturally, call options become more and move valuable as the underlying stock price goes up. For example, if you own a call option on YHOO stock with a strike price of 30.00 and the stock is trading at 35.00, then the call option would have an intrinsic value of 5.00 (35.00 stock price - 30.00 strike price).

On the other hand, put options become more and more valuable as the stock price decreases in valuable because the holder of the option has the right to sell the stock at a specified price, making it more valuable.

Option trading can be most profitable when several options contracts with different strike prices are traded in combination.

Option Trading Alert: MSFT Call Options Active

2005-10-26T20:14:00.000-04:00

MSFT saw high levels of trading on its November options contracts today, with call options volume on the "at the money" 25 calls far outpacing put option volume at the same strike. In fact, the Nov 25 Calls traded nearly 30,000 contracts today compared with less than 7900 contracts of the similarly priced Nov 25 Puts. Implied volatility on the November options rose to nearly 25, above the average of 20.

Increasing implied volatility along with such a high ratio of calls to puts traded indicates that the market is predicting a solid move higher for MSFT after earnings are released Thursday after the market close.

As you can see from the 9 month chart above, MSFT has just broken out of its most recent downtrend, another signal that the stock could be ready to move higher once earnings are released.

DaytradeTeam members should be ready for the possibility of a new options trade being entered on MSFT Thursday prior to the earnings release, with a vertical credit spread on the Nov Puts (Bull Put Spread) being a top possibility because of the opportunity to profit from options time-premium decay even if the stock moves slightly lower on the earnings report.

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Options Trading: GOOG Options Watch

2005-10-20T22:36:00.000-04:00

GOOG reported a breakout quarter after the bell on Thursday, and has the stock up over 31 points to 335/share in after hours trading. A month ago, we told you why we wouldn't bet against Google, and we maintain our bullish stance on this stock for online stock trading:

Notice how GOOG has been stuck in a trading range over the past month or so, with heavy resistance levels at 320. Well, if the stock holds the gains that it made in after hours into tomorrow morning, you will see a gap open well above resistance (highlighted in yellow).

Watch for the Oct 330 call options to go up in value by 1000% or more tomorrow, and look for opportunities to enter an Iron Condor or Butterfly Spread that has high profit potential at the 330 strike price, especially if time premiums on the options are high as expected at the opening bell.

Options Trading--Butterfly on AAPL Closed for +125%

2005-10-19T22:54:00.000-04:00

Today, our options trading systems got a big profit of 125% locked in on a butterfly spread of AAPL. To learn from this trade, let's take a look at the stock chart of AAPL, followed by the actual options trading alert that was sent out to our membership base early last week:

First, notice the uptrending chart on AAPL as we saw it at the time of entry on October 11---making this move up near the 55.00 strike price this week a real possibility:

Now take a look at the butterfly spread trading alert that was sent out to our membership base that same day:

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Buying AAPL Butterfly: 52.50, 55, 57.50
Limit: 0.40
Legs:
Buy 1 AAPL Oct 52.50 Call Option
Sell 2 AAPL Oct 55.00 Call
Buy 1 AAPL Oct 57.50 Call

Anticipated Hold Time: Either 1 day or through OCT expiration

Analysis-- AAPL has earnings tonight and this is a pure earnings play. Odds of success are low, but the potential payoff is very high, about 5 to 1 (+500%). We are hoping for AAPL to pop on earnings and peg 55 for expiration.

Expectations-- We have a per contract gain of $210 if AAPL closes right on $55. We are profitable between our two breakeven prices, which are 53 and 57. Max loss occurs under 52.50 and over 57.50 and is only $40 per contract. This is a great risk/reward trade.

*************************************************

AAPL continued higher (despite a small blip after earnings where it gapped down) as expected, and today we were able to close out the position for a nice gain just two days prior to expiration on Friday of this week.

Members were alerted to sell the butterfly spread on AAPL today for .90, a gain of 125% from our entry price of .40 in just 5 trading days!

We want to prove our profitability to you today! Our all-inclusive membership plan includes the Butterfly Spread System along with ALL of our other trading systems. Sign up for a one-week trial today!

Options Trading Alert: ECA

2005-10-17T13:24:00.000-04:00

There has been heavy volume and a spike in premiums on ECA October call options as speculation increases that the company may have holdings that other energy companies might be interested in. In fact, the out of the money October 50.00 call options are currently trading at 1.30 despite the fact that they expire on Friday of this week.

As you can see from the 9 month chart of ECA, we have seen a steady uptrend through most of 2005, with a strong pullback off of new highs in the last month or so. Look for opportunities with credit spread option trades on ECA, capitalizing on the extremely aggressive time premiums attached to the October options. A Butterfly Spread would give you a very high reward to risk ratio should ECA peg its max pain point of 50.00.

Of course, we will alert our members to opportunities on ECA and other stocks for high-profit situations through the week this week, looking to capitalize on time premium decay into the Friday expiration.

Options Trading Follow Up: AAPL

2005-10-15T17:23:00.000-04:00

On Tuesday of this week, our Options Trading Tips Feed showed you how AAPL's gap-down post earnings was going to provide an opportunity to enter a vertical credit spread on AAPL--also known as a bull put spread.

The theory was that AAPL was going to see overpriced October put option premiums, and was likely to resume its overall uptrend very quickly. Let's take a look at how well this play turned out with a quick peak at the chart of AAPL for the past week:

Notice how AAPL moved quickly up off the gap down (highlighted in Yellow), then extended gains higher through the week up near new 52 week highs by Friday. This means that anyone taking advantage of our signal to enter the vertical credit spread will likely see the maximum profit as the 45 put options sold will expire worthless next Friday.

Of course members of DaytradeTeam receive specific real-time trade entry and exit alerts on all of our options trading strategies.

Options Alert--JPM High Put Volume

2005-10-13T22:11:00.000-04:00

JPM is showing signs of potential trouble here, with put option volume outweighing call option volume by a ratio of almost 2:1. In fact, the out of the money 32.5 and 30.00 put options saw the most action today. In addition, JPM has seen a break of double-bottom support levels at 33.40 over the past week on fairly heavy volume. As you can see from the one year chart, this moved JPM into a new 52 week low before bouncing up today with the market rally:

With earnings due out next Wednesday, it is obvious that stockholders are trying to protect their positions buy buying some put options to reduce their risk after seeing the stock have so much trouble over the last year.

The increased put option activity and pullback off of recent 52 week lows might be a good opportunity for a 32.50 October butterfly spread. This would provide a very high potential profit on a small investment, with a max profit in the event that JPM pegs the 32.50 strike price...a nice potential max pain play.

Of course, we will be watching JPM and the surrounding options contracts closely on Friday and early next week. If we see a low-risk, high profit potential trade opportunity we will alert members of our options trading systems immediately as usual.

QQQQ Options Trading: Puts Overpriced

2005-10-12T19:14:00.000-04:00

QQQQ has certainly taken a beating so far during the month of August, and the options trading has been fast and furious so far. In fact, the stock has fallen over two full dollars since the beginning of the month. Anytime we see this type of rapid sell off on a stock, our first thought is to look at where the next likely stock support level is and see how the options near that strike are priced. Looking at the 1 year chart of QQQQ, you will notice that the stock has reversed and found significant, consistent support at around 37.00 several times in the past year:

After we have established that 37.00 could be the next major support level, we can take a look at the OCT 37.00 put options, which are currently priced at .25 each. In other words, these put options are priced so that QQQQ would have to fall ANOTHER 2% from 37.50 down to 36.75 within the next seven trading days just to break even! Yes, the markets are in very bad shape, and yes a massive selloff is possible. But the probability of QQQQ moving through the 37.00 support level by almost 1% is still fairly low at a 22% statistical chance.

If QQQQ continues to fall tomorrow early in the day and premiums on the October put options rise again, we would consider a vertical credit spread on QQQQ options with a sale of the Oct 37 put options (which strike you buy is up to your risk tolerance, but we'd probably go for the 35's at a nickel each). This is also known as a Bull Put Spread because you are using put options to form an overall bullish position.

Of course, all of our members will be alerted in real time should we officially place an options trade alert on QQQQ.

Options Trading Alert: AAPL post-earnings

2005-10-11T21:52:00.000-04:00

AAPL reported earnings this afternoon, and while profits were up substantially, revenue was lower than expected. The stock took a major hit in after-hours, and is likely to gap down substantially on Wednesday morning. This should provide an opportunity for options traders to see exaggerated options premiums AFTER an earnings release, which is fairly rare. First let's take a quick look at the 1 year chart of AAPL:

You will notice that the stock has been in a very solid uptrend for the past year, and even with a gap down to 45 - 46 level tomorrow (highlighted in yellow), would remain in an uptrending pattern. Remember, trading stock options is about more than just price--it's about volatility.

We think that tomorrow's gap down will likely provide for extremely high premiums on the out of the money October 45 put options. If a gap down does occur into the 45-46 range, look to initiate a vertical credit spread by selling the October 45 puts and buying the October 42.5 puts. This is also known as a Bull Put Spread, and will profit handsomely if AAPL resumes its upward trend and closes above 45 on options expiration day a week from Friday.

Options Trading Alert: PFE Implied Volatility

2005-10-10T12:32:00.000-04:00

PFE is seeing extremely high implied volatility for its October call options ahead of Wednesday's ruling in UK courts on Lipitor. Implied volatility is over 45, a full 18 above its average volatility level of 27. This indicates that investors believe that there will be a large reaction to the news on Wednesday in one direction or another.

Typically our options trading systems will look at higher-than-average implied volatility as an opportunity to place credit spread options trades such as Vertical Credit Spreads or Iron Condor Positions. This allows for profits from the decline in time-premium that will occur between now and the October Expiration.

For PFE, we would recommend picking one direction or the other for the stock and entering a Vertical Credit Spread that has a favorable reward to risk ratio--with a higher potential profit than max loss. Also make sure that your position is one that will profit in the event that the underlying stock does not move at all. This type of online options trading strategy can be risky on a single trade basis, but will likely result in profitability over the course of many trades because of the fact that these credit spread positions are profitable over time if all else remains constant.

Avoid Buying Options that Expire within 75 Days

2005-10-09T00:09:00.000-04:00

As a general rule in Options Trading, it is a good idea to avoid BUYING options that expire in the next 75 days. Both call options and put options will lose their time premium at an accelerating pace during this time, with extremely high depreciation in the final 20 days of an options contract.

For net-debit trades (where the overall cost of the trade comes out of your brokerage account) like we use in our Directional Put and Call Options System and Straddles or Strangles, we advise trading options that are 3 or more months from expiration. This helps you to reduce the effect of time-premium depreciation in your portfolio because it is likely that you will exit the position prior to the final 75 days of the contract.

Of course, there are exceptions to this options trading rule. In the final days of an options contract, and with some in the money options contracts, you will find a zero time premium attached. These contracts can offer you the full leverage of trading options without exposing yourself to the negative impacts of premium decay.

Calendar Call Options Spread

2005-10-06T16:45:00.000-04:00

A Calender Spread is also called a "horizontal spread", and is basically a method of doing a covered call without having to use all the buying power required to buy the actual underlying stock. The downside is that in a Calender Spread, if the stock takes off too quickly you could actually lose money--which is not the case with a covered call.

Here is how a calender spread works on a stock that you expect to have a neutral or slow and steady rise:

Buy a call option with a strike price that is near the money or at the money, and that expires in 9 months or more
Sell a call option with the same strike price that expires in one month or less (you can repeat this every month)

If the stock price stays the same or moves slightly higher as you expect, the time premium of the option you sold in step 2 will decay at a much faster rate than the option you bought in #1, resulting in an income-producing options strategy. This strategy is a good way to generate monthly income without having to use a lot of buying power to do it.

Option Trading Software

2005-10-05T22:51:00.000-04:00

Options trading can be extremely profitable and fun, or it can be extremely costly and frustrating. Part of the difference is knowledge and experience—no question. But having a great option trading software platform can turn the odds of success in the favor of even the most novice options trader.

Obviously, there are tons of programs on the market. Most are poor, and some are good. If you have thinkorswim as your broker, you’ve already got access to the most powerful options trading software system in the world—for free! If you haven’t yet switched to thinkorswim and are looking for a retail program, here are some features that we would not do without:

Real-Time quote feed for real-time scanning of all options exchanges
Analysis tool that allows you to see how volatility changes, time passage and stock price movements will effect the position and your overall portfolio
Real-time market volatility analysis will allow you to spot opportunities quickly
Ability to adjust simulated optins trades “on the fly”

Stock Option Trading--not just for gamblers!

2005-10-04T21:40:00.000-04:00

Stock Option Trading can be very confusing for new investors. In fact, most won't even try options because of the assumption that trading options is more of a gamble than an investment. The reality is that trading options on stocks can be an important part of every portfolio--regardless of risk tolerance and experience level!

Here are a few things many new investors don't know about trading options:

Options can help reduce the risk level of your portfolio by capping the downside to every stock that you own!
Options trading that involves more complex (but fun and easy to learn) credit-spread strategies like Iron Condors and Vertical Credit Spreads and Covered Call positions can actually be used to produce income (money INTO your brokerage account) on a month-to month basis!
Trading Options is not expensive--in fact, most brokers only charge one or two dollars per contract, and contracts are for 100 "shares"!

Of course, we don't recommend trading options until you are completely comfortable with the process. That's exactly why the experts at DaytradeTeam include all options sytems in every membership and encourage members to ask questions and LEARN from the process!