Friday, November 10, 2006

Make Money in the Market no matter which direction a stock Goes

It is possible in modern times to trade in stock options that in a way that allows you to protect your money.

Let's say that you are not sure if Microsoft's stock will go up or down, but you don't want to lose money.  You've got principal that you have to have when you retire.  You can use Stock Option investment strategies that essentially allow you to protect your money and your principle.  Essentially, how it works is that you place a bet (stock option derivative) on both sides of the transaction.

You win if the stock goes up, and you lose.  However, the two net out and you protect your investment principle.

If you want to take big risks, you can invest in options and leverage your investment, buying an option to buy a stock at a fraction of the actual cost of the stock.  If the stock goes up, you have an option to buy that stock at your guaranteed lower price and immediately sell it at the new higher price.

So if you buy an option on Microsoft stock at $1 for an option to buy a share at $28 and the Share goes up to $30.  You have $1 invested, you cash it in and get the share for $28 and immediately sell it for $30.  You net $1 in profit and get your $1 principle back ($30 - 28 = $2)

A stock options newsletter is available that will help yoou start to learn the ins and outs of these transactions and how you can protect yourself or take big risks for a potentially big reward.  These investments are risky if you do not know what you are doing, so do the research and get some good tools and advice.

PowerOptions recently provided a release describing their new SmarSearchXL.  They provide investors with internet based data that can help identify the highest return option.  Information about their tools and services are available in the newsletter as well.

No comments: