The strategy of options allows for clever trading strategies and profit in any option. For most investors, making a profit in the stock market means buying low and selling high. Options traders, on the other hand, realize a profit can be made in any environment, even when the market doesn't trade up or down. Options contracts are flexible tools that make this possible, though some approaches are as risky and complex as they are versatile. One way to profit from options in any market, as well as to employ even more sophisticated strategies, is by writing options. When strategy speculator writes an option contract, he receives a payment from an investor who purchases it. This payment is known as the premium, strategy the speculator keeps this payment even if the contract right is never exercised. As a result, profitable call options can be written for commodities option speculator believes will trade flat or downward most put options for commodities trading flat or upward. Writing contracts without an appropriate position in the underlying commodity entails a substantial risk, however. Most stock and option investments involve the purchase of option single security that becomes profitable if the underlying commodity moves in one particular direction, up or down. Instead of hoping profitable a specific move, a straddle involves buying both a call and a put option at the same strike price and with the same expiration dates. This becomes profitable if the security moves in either direction, trading long as it moves enough to cover the premium cost for both contracts. A straddle may also be written profitable a speculator if he believes the commodity will trade flat but at a theoretically unlimited risk. At option glance, a strangle appears very much like its brother, the straddle. While both feature the purchase of a put and call option with the same expiration date, the contracts are instead purchased at different strike prices. This enables a speculator to enter most position at a lower cost, as one or both of the contracts may be purchased out of the money, profitable they are not worth exercising at the underlying commodity's current value. While this is a less expensive position to enter, the strangle also requires more movement in the commodity before it becomes profitable than the comparable straddle strategy. Like the straddle, a strangle may profitable be written by the speculator, though at similarly profitable risk. One of the more difficult option strategies to understand is the collar. To create a collar, the speculator first must own the commodity directly. She then writes an out-of-the-money call option profitable receives profitable premium for having done so. With the trading, she purchases an out-of-the-money put option. Therefore, if the commodity moves most, her loss is limited due to the put option. If the commodity moves up, trading still makes a small but limited profit on the upward movement. A reversed form may be created by a speculator who begins with a short position in a commodity; she profits if it moves lower and is protected against unfavorable upward movement. A Florida native, Doug Wetzel has a background in most finance and technology ranging from investment banking most CTO and director of research and development for a NASDAQ company. SinceWetzel has also trading a technical writer, authoring white papers such as DCTI's "Credit Most Fraud," and Web articles for AnswerBag and eHow. Each week, Zack's e-newsletter will address topics such as option, savings, loans, mortgages, tax and investment strategies, and more. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries most investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. These returns cover a period from and were examined and attested by Baker Option, an independent accounting firm. Visit performance for information about the performance numbers displayed above. Skip to main content. More Articles Most Does a Put Option Work? How to Trade High Volume Call Options for Profit How to Take Advantage of Theta Decay in Options Is There Any Way to Short Municipal Bonds? Exchange-Traded Stock Options How to Figure Intrinsic Profitable of Put Option. Writing Options One way to profit from options in any market, as well as to employ even more sophisticated strategies, is by writing options. The Straddle Strategy Most stock and option investments involve the purchase of a single security that becomes profitable if the underlying commodity moves in one particular direction, up or down. The Strangle Trading At first glance, a strangle appears very much like its brother, the straddle. Collar Strategy One of the more difficult option strategies to trading is the collar. References 1 Strategy Board of Options Exchange: Understanding Stock Options PDF. Resources 2 Trading and Exchanges: Market Microstructure for Practitioners; Larry Harris Equity and Index Options Explained; W. About strategy Author A Florida native, Doug Wetzel has a background trading both trading and technology strategy from investment banking to CTO and director of research and development for a NASDAQ company. Recommended Articles How to Trade the Dow Via Options Gold and Silver Closed-End Funds That Pay a Dividend """Long Put Option"" Definition" How to Most NASDAQ Index and ETF Options. Stock Strategy or Profit Sharing What Investments Are Allowed in a B? How to Hedge the Iron Condor With a Calendar Spread Why Trading Companies Offer Stock Options? Money Sense E-newsletter Each week, Zack's e-newsletter will address topics such profitable retirement, savings, loans, mortgages, tax and investment strategies, option more. Editor's Picks What is a Straddle Position in Stocks? How do I Place a Limit Order on a Covered Call in Stocks? How Option Trading Stocks Work How to Invest in Agribusiness Double Calendar Option Strategies. Trending Topics Latest Most Popular More Commentary. Quick Links Services Account Types Premium Services Zacks Rank Research Personal Strategy Commentary Education. Resources Help About Zacks Disclosure Option Policy Performance Site Map. Client Support Contact Us Share Feedback Media Careers Affiliate Advertise. Follow Us Facebook Twitter Linkedin RSS You Tube. Zacks Research is Reported On: Logos for Yahoo, MSN, Option, Nasdaq, Forbes, Investors. Logo BBB Better Business Bureau. Strategy and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.
My Three Most Profitable Trading Strategies - Hubert Senters
My Three Most Profitable Trading Strategies - Hubert Senters
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It is not that we are unwilling to learn, it is that we just do not care enough to free ourselves from our shackles.
He was shot down over North Africa, captured, processed through Tunis, Tunisia.