Archive for March, 2011


Things to Consider When Learning to Trade Options

Filed Under: Options by Bill — Comments Off
March 31, 2011

If you are a person who wants to learn to trade options, then you must first learn what a stock option is. First of all, a stock option is not the same as holding or owning an individual share of stock. It is instead a contract between the holder of the option and an investor who wishes to purchase the contract. The major distinction is the fact that owning an individual share means you actually own a piece of the company. The complete opposite is true for options you simply own the contract and not an actual part of the company. This is a key component that first time investors who wish to pursue this endeavor fail to understand. This can ultimately lead to the potential of heavy losses and can really damage a persons initial attempts at building a strong portfolio. Therefore you also need a have a firm grasp of some proven options trading tips that will lead to much higher yields.

There are many legitimate resources on the internet today that will help those who wish to pursue this type of investment philosophy. Standard financial sites will give the investor a beginners level understanding of what it means to trade an option, and what it means to actually own one. Another piece of important information to consider in developing a strategy includes what call and puts are and how they can impact a trade. You must also learn what it means to have a contract reach a maturity date and when you are required to exercise the options that you hold. These terms and their relationship to the investment are important to understand when you are trying to hedge the amount of risk you expose yourself too. Keep in mind that this investment strategy is not difficult to learn, and can be quite profitable once you master the basics.

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A Guide to Trading Propane Futures

Filed Under: Commodities by Bill — Comments Off
March 27, 2011

Everybody who has invested in a commodity mutual fund is aware of the crude oil, natural gas and gasoline commodity futures market. However many people are still unaware that propane also trades on the futures exchange. Propane futures have been traded on the New York Mercantile Exchange since 1987.

Investors that are interested in trading propane futures will need to know that open cry trading begins at 9.20am New York time. It closes off at 1.10pm. Propane also trades on the CME Globex platform from 6pm until 5.15pm Sunday through to Friday. The market takes a 45 minute break every day between 5.15pm on the current trade date and 6pm on the next trade date in New York time.

There are a few details that investors will need to know before they get started trading propane. Firstly the current contract size of a propane future is 42,000 gallons. This is equivalent to 1,000 barrels of propane. Also investors should be aware that every one cent move on the contract will equal 4.20.

Many investors choose to trade in propane as it will hedge their energy risks. For example a business that believes petrol prices will be going up in the current year will purchase a propane contract in order to protect themselves from a sudden price strike.

Investors that are interested in this market will need to contact their commodities broker. If an investor is new to trading, they will need to find a broker and set up an account. Both seasoned and new investors need to remember that futures trading is risky and can lead to losses quite easily. Due to this many brokers will need to see an account balance before they work with an investor. Brokers like to ensure that the investor is financially stable enough to handle a loss in the commodity market.

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Advantages Of The Gold ETF

Filed Under: Commodities by Bill — Comments Off
March 24, 2011

When looking for good stocks to invest in right now, something that can hold its value, even during the economic crisis you should consider precious metals. Investing in these have become one of the most reliable investments that people have made when compared to stocks or bonds because the value remains stable. Their is still a new way to invest in gold, the ETF and it has started to attract more investors than ever.

Before the new ETF the investors would have to store the gold in a separate area and have it insured. Then moving the gold was nearly impossible because of its size. However, with this new turn of events it is allowing investors to buy precious metals as easily as if they were buying stocks.

A major advantage of the gold ETFs is investors have the chance to purchase fractions of an ounce. This was not possible before because of the gold bars. This is allowing more people the option to purchase these precious items and not have to worry about the start-up cost of investing. A good broker will be quick to point this out and to prove how good they are, they will typically have some form of a precious metal or natural resource in their portfolio.

Something else that can be seen as good for the investors is that many countries do not see the investor as the true handler of the precious metal in an ETF. You just need to make sure that you speak with the broker and accountant that is trusted before you think that this is true.

Often you will see that the broker that you work with will charge a small amount of money for the ETF, but it is not that expensive. However, this is something that is best handled between the chosen broker and yourself. The wonderful thing about an ETF is you can slowly increase your value over time. All that is required is a quick phone call to the broker to see when you can reach that level you want to be at. Just remember that this is an investment, but it is one that is worthwhile and is considered an easily accessible.

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Top Stocks to Buy for Beginning Investors

Filed Under: Personal Finance by Bill — Comments Off
March 24, 2011

Since beginning investors may have limited funds, they will want to purchase stocks with safe and steady growth. In challenging economic times, a beginning investor may want to place all of their money in a portfolio of high-tech stocks however, this is not always the correct way to go. As people have seen with the Sock Market Crash of 1929 and again in recent years, a person can be a stock multi-millionaire in one day and lose it all in the next.

Having a diverse portfolio allows beginning investors to see which types of stocks are outperforming others, without committing all of their invest-able income into one company. Looking at long-term progress, a stock portfolio needs to be checked daily and tracked long-term. This means an eager beginning investor can check to see how their particular holding is performing on a daily basis, but dont make any hasty moves until the long-term progress record of that holding has been analyzed.

Some of the most basic types of stocks, a person a beginning investor should buy, are those that will perform even in tough economic times. While everyone may not be able to go out and buy the latest technology gadget or a new car, people will still need to go to the hospital, families will still need to buy groceries, and employees will still need gas for their cars. Look, not only at the retail business itself, but also at the suppliers that provide the retail business with their inventory. This means pharmaceutical companies, petroleum companies and of course, utility companies. Expand and see the bigger picture, which in turn will allow you to have a more diverse portfolio.

Before buying every stock you want, make a short-list. Look at the stocks performance during the past two years, especially when the market took a turn for the worse. How did it compare to the price per-share it was selling for when the market was good? If there is relatively little difference or if the stock actually increased in value, it may be a good stock to add to your portfolio. Remember to keep your stock portfolio diverse and dont be afraid to add new, steady-performing stocks.

Expand your knowledge on getting a top stocks to buy at the author’s website.

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