Butterfly Options » Investing

How To Start A Home Business With Options Trading And Credit Spreads

admin — Mon, 25 Jan 2010 23:31:55 +0000

If you are like most people, in these times of economic uncertainty you are looking for a way to earn extra money, that doesn’t take a lot of time, preferably from home and that doesn’t require a lot of capital to get started. If you fall into this category then options trading might be just what you are looking for. Although trading is a simple business to get started in, it is far from easy and be wary of anybody who tells you differently. Also you may have heard that trading options is risky, and while nothing in life is risk free, there are ways to substantially reduce the risk.

How much money do I need to start?

One of the beautiful things about options trading is it’s one of the few businesses that you can take for a free test drive to see if you can be successful at it. By trading in a simulator you can start your business with no money. Obviously you won’t be earning anything either, but you will be gaining valuable knowledge. You can find a simulator at CBOE.com. After you’ve traded in the simulator for a few months and become consistently profitable you can start with as little as $2,000.

Finding a broker

The first step in getting started in an options business is finding a broker. There are many (excuse the pun) options available, a few of the good ones include, OptionsXpress, TradeStation and Interactive Brokers. These are all members of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which are two organizations that protect you against fraud from financial brokers.

Putting the Odds in your favor

While this isn’t a comprehensive list there are a few things that you can do to stack the odds in your favor when dealing in stock options. First of all rather than buying puts and calls you can use credit spreads. This method of selling a higher priced option and purchasing a lower priced option alone will stack the odds enormously in your favor simply because this method can allow you to make money whether the markets go up, down or sideways. As a matter of fact using this method can allow you to win as much as 80-90% of the time, which is why professional traders use this type of trade to generate consistent income. The next thing you want to do is a bit of technical analysis and look at the S&P stock index. If the index is moving above it’s 200 day moving average you generally want to be purchasing stocks or using bull put credit spreads. If the index is moving below it’s 200 day moving average you should short sell stocks or use bear call spreads. How much can I earn? This can fluctuate depending on market conditions but by using credit spreads you can make anywhere from 5-20% a month. So with $10,000 you can generate anywhere from $500-$2000 in extra income a month.

Reducing Your Risk

1.Start off by trading in a simulator at CBOE.com

2.Always use a stop loss or have your positions hedged.

3.Never trade with money that you need to pay for you day to day expenses with such as rent and bills. Nervous money always loses.

If you’d like to find out more about options trading and credit spreads click on the link in the resource box below and sign up for a free 10 part course.

What is a Vertical Spread?

admin — Sun, 24 Jan 2010 23:37:46 +0000

Ivybot Automated forex Trading review

admin — Sun, 10 Jan 2010 23:54:05 +0000

IVYBOT REVIEW

IvyBot is a very sophisticated trading system built by some of the most intelligent minds in the world, graduates of Ivy League Universities, thus the name Ivy-Bot.

It uses a strategy built through years of extensive trading research, testing, and development. IvyBot is a fully automated system that provides a true solution for people who want to trade the Forex market with no human intervention.

IvyBot makes you money both in up and down market conditions.The robot was created to be able to predict those price changes on a daily basis. The Forex marketplace has exploded and record profits are being made to those with the right tools IvyBot The advantages of trading Forex are obvious:

Low Startup – Start with as little as $50!Huge Market – $3 TRILLION traded around the world every day.

Find live results using the latest professional forex trading robot, with reviews on the expert advisor the Forex market is actually bigger than ALL the world’s stock, bond, and futures markets combined!They don’t mention that on the 5 o’clock news

24/6 – Non stop action, 24 hours a day 6 days per week (Sunday – Friday)

Low Cost – While with stock trading, futures and options you pay spread plus commission, with Forex your only “cost of trade” is spread (that can add up to ALOT!)

Up & Down – Profit from rising and falling prices…it does not matter what way the market goes. Up, Down, Sideways, there are always opportunities to profit.

No Size Limit – as BIG or as SMALL as you want!

So For The Best Automated Trading Software Download At www.ivybot.com

Is ivybot a Professional Forex Trading Robot?

admin — Sun, 10 Jan 2010 12:08:16 +0000

IVYBOT REVIEWIvyBot is a very sophisticated trading system built by some of the most intelligent minds in the world, graduates of Ivy League Universities, thus the name Ivy-Bot.It uses a strategy built through years of extensive trading research, testing, and development.IvyBot is a fully automated system that provides a true solution for people who want to trade the Forex market with no human intervention.IvyBot makes you money both in up and down market conditions.The Forex marketplace has exploded and record profits are being made to those with the right toolsThe robot was created to be able to predict those price changes on a daily basis.Find live results using the latest professional forex trading robot, with reviews on the expert advisorIvyBot Features and AdvantagesThe advantages of trading Forex are obvious:Low Startup – Start with as little as $50!Huge Market – $3 TRILLION traded around the world every day (The Forex market is actually bigger than ALL the world’s stock, bond, and futures markets combined! They don’t mention that on the 5 o’clock news)

24/6 – Non stop action, 24 hours a day 6 days per week (Sunday – Friday)

Low Cost – While with stock trading, futures and options you pay spread plus commission, with Forex your only “cost of trade” is spread (that can add up to ALOT!)

Up & Down – Profit from rising and falling prices…it does not matter what way the market goes. Up, Down, Sideways, there are always opportunities to profit.No Size Limit – as BIG or as SMALL as you want!

So For The Best Automated Trading Robot www.ivybot.com

Ivybot Software Review-Forex Trading

admin — Sun, 10 Jan 2010 00:28:17 +0000

You are about to see a new trading robot like no other. 4 trading robots work together to create the best trading robot ever! As everyone knows, day trading is considered to be a highly risky undertaking.

Since we cannot forecast when the value of the stock will rgo up or down it is essential for the day traders to monitor all changes in price throughout the day. Why you need the IvyBot Professional Forex Trading robot… The forex robot all traders have been waiting for, whether or not they know it.

IvyBot has been released. Up Until the Ivybot Release, this automated forex trading robot was only used by the testers and the financial elite. On July, 28th , 2009 regular traders around the trading world were able to buy ivybot professional trading robot online. In this IvyBot review we will look into the key features of this forex trading robot and find out if Ivybot really works or is it just another of the many online forex trading robot scams.

If Ivybot is a scam, my bank book is a liar…. The advantages of trading using IVYBOT Forex robot are obvious:

Low Startup – Start with as little as $50! Huge Market – $3 TRILLION traded around the world every day (The Forex market is actually bigger than ALL the world’s stock, bond, and futures markets combined!

They don’t mention that on the 5 o’clock news) 24/6 – Non stop action, 24 hours a day 6 days per week (Sunday – Friday)

Low Cost – While with stock trading, futures and options you pay spread plus commission, with Forex your only “cost of trade” is spread (that can add up to ALOT!)

Up & Down – Profit from rising and falling prices…it does not matter what way the market goes. Up, Down, Sideways, there are always opportunities to profit.

No Size Limit – as BIG or as SMALL as you want! You get a step by step 50 page guide. This insures everything goes correctly to make you PROFIT! This is the only Forex Trading robot system that trains you prior to trading. This system even comes with a list of websites you can trade on paper before you invest real money.

If you want to be the best you can be in the market, IVYBOT is the tool you need www.ivybot.com

Is IvyBot Scam Or Best Automated Forex System Trading

admin — Sat, 09 Jan 2010 12:34:04 +0000

In this IvyBot review we will look into the key features of this forex trading robot and find out if Ivybot really works or is it just another of the many online forex trading robot scams. You are about to see a new trading robot like no other. 4 trading robots work together to create the best trading robot ever! As everyone knows, day trading is considered to be a highly risky undertaking. Since we cannot forecast when the value of the stock will rgo up or down it is essential for the day traders to monitor all changes in price throughout the day. Why you need the IvyBot Professional Forex Trading robot… The forex robot all traders have been waiting for, whether or not they know it. IvyBot has been released. Up Until the Ivybot Release, this automated forex trading robot was only used by the testers and the financial elite. On July, 28th , 2009 regular traders around the trading world were able to buy ivybot professional trading robot online. In this IvyBot review we will look into the key features of this forex trading robot and find out if Ivybot really works or is it just another of the many online forex trading robot scams. If Ivybot is a scam, my bank book is a liar…. The advantages of trading using IVYBOT Forex robot are obvious: Low Startup – Start with as little as $50! Huge Market – $3 TRILLION traded around the world every day (The Forex market is actually bigger than ALL the world’s stock, bond, and futures markets combined! They don’t mention that on the 5 o’clock news) 24/6 – Non stop action, 24 hours a day 6 days per week (Sunday – Friday) Low Cost – While with stock trading, futures and options you pay spread plus commission, with Forex your only “cost of trade” is spread (that can add up to ALOT!) Up & Down – Profit from rising and falling prices…it does not matter what way the market goes. Up, Down, Sideways, there are always opportunities to profit. No Size Limit – as BIG or as SMALL as you want! You get a step by step 50 page guide. This insures everything goes correctly to make you PROFIT! This is the only Forex Trading robot system that trains you prior to trading. This system even comes with a list of websites you can trade on paper before you invest real money.

Click here to Buy And Download IvyBot

Directional Vs Non Directional Trading Strategies

admin — Tue, 05 Jan 2010 12:49:10 +0000

We can classify trading strategies followed by all types of traders into two broad categories as directional trading strategies and non directional trading strategies. Both strategies require different types of approaches, different levels of market knowledge and different trading requirements. Directional trading strategies are trading strategies which include taking long and short positions in market. Traders profit when the prices of instruments in which he take long positions rises and when the prices of instruments in which he take short positions drops. Most of the trading strategies practiced by common traders are directional trading strategies. Some common examples of directional strategies are trend trading strategies, breakout systems, moving average cross over strategies and pattern recognition strategies.Non directional trading strategies, on the other hand, are market neutral strategies. The trader does not take any net long or short positions; instead he matches his positions smartly. Most non-directional trading strategies are complex strategies which require very good automation and pre-defined trading rules. These strategies are for expert traders and big players. Some common examples are sector matching strategies, pair trading strategies, arbitrage strategies and stock matching strategies.Advantages of directional trading strategies include,1. Most of them are simple and flexible, so that any kind of trader can follow.2. They can be used to trade all kinds of financial instruments – stocks, options, futures, funds, bonds, currencies, commodities, all.3. They need less automation and technical analysis skills.4. The basic idea is to go long in an uptrend and to go short in a downtrend.5. Traders can use basic risk minimizing tactics like stop losses and position offsetting.The disadvantages are; most of them can only be practiced when market is trendy, there is higher downside risk and position sizing limiting, also traders are limited with their risk minimizing tactics.Advantages of non-directional trading strategies include,1. They suit you, if you are a large-scale trader with high position sizes.2. Most of these strategies demand calculated diversification, which is a good risk minimizing tactic.3. Trades are done according to pre-determined strategies thus less human interfere (and emotion) involved.4. Traders can limit their trading risks in may ways – traditional and innovative.The disadvantages are; not suitable for all types of instruments and markets, require complex trading system and good market knowledge, and require extreme money management.

Options Trading 101

admin — Mon, 04 Jan 2010 23:38:41 +0000

The individual investor will typically include some stocks in their investment portfolio. And whether they are a long term trader or in it for much quicker returns, many investors understand and feel somewhat comfortable with the concepts and techniques of trading stocks.
Options tend to be much less understood – and therefore avoided. But Options can form an extremely valuable part of your trading strategy as they can provide tremendous returns!
So here I will try and give you some of the fundamental concepts behind trading options.
Options are a contract conferring the right to buy (a call option) or sell (a put option) some underlying instrument, such as a stock or bond, at a predetermined price (the strike price) on or before a preset date (the expiration date). Options officially expire on the Saturday after the third Friday of the contract’s expiration month but because the markets are typically closed on Saturdays, the Friday is commonly used as the expiration date.
A key concept to grasp is that, when you buy an option, you don’t actually own the underlying security. You simply own the right to buy (or sell) at a specific point in time. But, of course, the price of the underlying instrument and the time remaing before expiration both affect the value of the option itself.
So in trading options you have two main ways to make money on them:
- You can hold to maturity and then exercise the option (with the expectation that the underlying instrument is then worth more than what you are entitled to buy it at – your “strike price”)
- You can sell the option itself prior to expiration (in the expectation that the value of the option itself has risen above what you paid for it)
A great many investors do in fact hold until maturity and then exercise the option to trade the underlying asset. Assume the buyer purchased a call option at $3 on a stock with a strike price of $30. (Typically, options contracts are on 100 share lots.) To purchase the stock the total investment is:
($3 + $30) x 100 = $3300 (Ignoring commissions.)
So if, at expiration, the stock is worth more than $33 you’ve made a profit (You can sell your 100 shares for more than $3300 right away).
Speculating on the actual value of the option itself is the second alternative.
Let’s use the same example above.
You bought your options for $3 with a strike price of $30.
If the price of the underlying stock goes above $33 at any time prior to expiration, then naturally more people will want to try and get a hold of that option you own, because they see a high likelihood of making a profit off the underlying security. With the increased demand for that option, the value of the option itself will likely go up. So you can sell the option to that higher bidder for a profit.
For example, if the price of the underlying stock rose to, say $35 then the option itself may become worth, say $4 on the open market. So you sell your options for $4 and make a nice 33% return. Without ever having owned the underlying stock itself.
Those are the kinds of returns that make options so attractive.
Many brokers offer trading accounts to individual investors that allow options trading and frequently at very competitive commision rates.
It really isn’t very difficult to get started.
Options trading is risky, so manage your risk and your assets wisely and only use a small percentage of your overall portfolio for trading options. But do consider them as an additional component of your investment strategy, as they can yield tremendous returns when traded correctly.

Online Trading Education

admin — Wed, 30 Dec 2009 12:22:44 +0000

Rating: 5 out of 5 stars

Reviewing: INO TV’s Online Trading Education

Learning in the financial industry is a lifelong process. The complexity of the global marketplace and the level of competition amongst traders and investors means on-going education is not an option but rather a necessity. INO TV has given me the online trading education I need to maintain and grow my skills. If you have been investing or trading for a while no doubt you have seen symposiums or other educational programs you have wanted to visit but couldn’t because they were too pricy or offered at the wrong time. In some circumstances you may be interested in learning a specific subject but cannot find a great resource. On INO TV you will find in excess of 1000 hours of online trading education resources in their digital library. INO TV is audio and video online trading education available 24 hours a day.

The educational material of INO TV is categorized into eleven channels tailored to a traders or investors interest. The Channels are:

Channel 1 – Beginners

Channel 2 – Charts & Analysis

Channel 3 – Currency Trading

Channel 4 – Day Trading

Channel 5 – Futures/Commodities

Channel 6 – Money Management

Channel 7 – Options Trading

Channel 8 – Market Psychology

Channel 9 – Spread Trading

Channel 10 – Stock Trading

Channel 11 – Trading Systems

Regardless of your motivation in online trading education its likely INO TV has programs for you. A search tool is incorporated into INO TV to help traders and investors find the material that interests them the most. In case you have a question or a problem their toll free support number is accessible to answer your questions. One quarterly or annual enrollement entitles you to their entire library and there are no hidden fees. If you want to evaluate INO TV for at no cost there are spotlighted videos you can watch to give you an idea of what INO TV has to offer. I would also encourage you to visit the INO TV Premium page and browse through the channels to see what’s available. This will give you an idea of the richness and depth of online trading education available on INO TV.

Learn about Free INO Online Trading Education Videos Here

Learn about Premium INO Online Trading Education here

Some of the experts I enjoy viewing are John Murphy, Martin Pring, Larry Williams, and Mark Cook but there are a variety of others. At last count I saw 138 professionals online and new programs are being added all the time.

Bottom Line: If online trading education is significantto you INO TV is the greatest resource you will find anywhere.

www.sealionllc.com

Simulated Stock Trading – The Fast Track to Your Trading Success

admin — Sun, 20 Dec 2009 01:11:49 +0000

What so scare about stock trading is the possibility of losing millions of dollars of your money.
That is why it is important to practice first before doing real time trading.
One of the best way to learn about trading, no matter the instruments are through practicing simulated stock trading or known as virtual stock trading. The data can as real as the real stock market, but with fake money.
In that way, you can limit your loss, because practically there is no loss at all. But still having fun doing stock trading. Optionsxpress provide free simulated stock trading you can access here. Inside you will find enough things to start your trading venture, you can practice trading option, spread, future, short sell and so on.
Optionsxpress also act as online broker, and that is a good thing for you. Because once you have accustomed with the trading environment of Optionsxpress, you can start trading immediately without the necessity to learn all sort of administration chores in different broker.
Knowing Which One is Your Best Broker
Knowing which one is your best broker is crucial to your trading success. Many people have experienced failed trading venture not because of they have a lack of trading knowledge or experience but simply because of bad broker.
One thing you might want to take into consideration when choosing your trading broker especially online broker is the reliability of your order execution. Many bad brokers failed to bring reliable order execution that cause slippage and made their customers paid the price dearly.
You might want to review people experiences with that broker by visiting online forum or reviewing customer survey website. This way you can have a grasp on the reliability of particular broker compared with others.
Generally speaking, there is no such thing such as perfect broker. So, no matter how great the broker seems to be, on few occasions you might discover some errors with their brokerage services.
At this point you might want to decide how much is too much. And the point of error at which you can tolerate.
What To Learn from Your Simulated Trading
It is a common truth that simulated trading will never replace the emotional pressure of real online trading. But simulated trading with help you find the best system to be used as your arsenal when it comes to real online trading.
The simple rule of advice is “try to make consistent profits 6 months before you move into real trading”.