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Fellow Investors
& Traders,
Finding the right buying opportunity for stock options is the key to
making consistent investment profits in the stock market.
If you’re just starting
out trying to find your first buying opportunity, you don’t have to
spend a lot of money, actually you can start
with about $150! Of course, more would be better – but if you are on
a limited investment budget – getting started with your first stock
option buy on $150 is just fine!
Starting with $500 - $1000 will give you more buying power!
Step 1. You need to have your brokerage
account open and funded with some investment money (Start with as
little as $150). I’ve recommended “OptionsXpress.com” for the
best brokerage firm – I think they have the most functions and
features for individual investors with the best cost for stock option
investments. I also have accounts with them and have had excellent
customer support all the time!
One of the great features that I use every week
is the "Virtual Trade
Platform" on OptionsXpress.com. You can use this
Virtual Trading Platform to simulate the actual buy/sell transactions
that you would use if you were trading with real money. It's easy to
understand, and most of all it will give you some really good
practice in trying out different strategies for planning what you
want to buy (stock shares or stock options). Click
Here! to see the screen!
Click
Here! to see one of my
Virtual Trading Accounts and what I’ve bought over the past months.
Now,,,,Here's what you do:
A.
Fill out the OptionsXpress.com online application to get your account
open. (You don't have to fund it yet
-- you can do that whenever you get ready – you don’t need to
send any money at this point --
you just want to get everything setup so you can start using
the Virtual Trading Platform
to start practicing).
B.
Once you have your username and password setup, you can get start
using the Virtual Trading Platform to start planning for good buying
opportunities.
C.
Get a copy of my stock price calculation software program to help
simplify all of your investment pricing calculations and help you
better organize your planning strategies.
Step 2. Now you’re ready to look for buying
opportunities. Here’s where
you need to start doing your research (“Due Diligence”) to find the
investment companies that have stock options to offer on the open
market. Not all companies
offer “stock options”. You can find out easily by going to Yahoo.com
(Click on “Finance”) and enter the stock symbol (Ex. AAPL). On the left side of the screen (under
“Summary”) there is a link named “Options”. If you click on
that link you will see the available stock options – if the link is “grayed
out”,,,the company does
not offer stock options at the current time.
Click
Here! to see my current list
of stock option investment companies that I follow. This is a good list to start from
(and what I use every month) – these are Top Quality companies that
offer available stock options every month – and the most important
factor is that they are “price movers”. They consistently move higher in
share price ahead of the earnings date which makes the stock option
prices increase in value also.
Step 3. How do you find these
low-cost stock options?
The key to finding low cost stock options from top quality is “Planning”!
Once you define which companies you plan to invest in (make your list
of 1 - 6 Companies), the next activity
is finding out when the company is due to report their earnings and
write that date down on your list next to the stock symbol, or add it
to your investment calendar.
Here’s one to add as
a “Top Buy”! Apple Inc.
(AAPL) -- One of the Top Quality Technology companies with great
product lines, consistently good earnings, and high volume activity
on their stock options. Major investors quietly buy and sell large
volumes of Apple Stock and Options every week – and it’s one of my
top buys every month. Follow
the price movement and activity on Apple Inc. over the
next 6 months – this will give you good experience and first-hand
exposure to following a Top Quality company investment.
Now, remember I
mentioned the link named “Options” from the Yahoo.com
“Finance” section. There is where you will find the actual current
prices of the available stock options. From that screen you can see the
current month available stock option prices and also future months available stock options prices. Just click on the different months
to see the information. Now
you need to choose which stock options (current month or future
months) to look into for potential buying opportunities. In most cases the price premiums
will be higher (will cost you more to buy them) for the future months stock
options, but will also give you a longer timeframe before the stock
options expire. The current month stock options are generally
cheaper, so you have to decide which ones you would want to buy – the
cheaper monthly option or the more expensive further out month
option.
I generally try to
find stock options in the price range of .35 cents to $2.75 that I
think has the potential to increase significantly in value over the
next few days or weeks. Also, depending on if I’m
researching some of the more volatile companies (like AAPL, AMZN,
AZO, BIDU, FFIV, GOOG, GS, IBM, MCD, MA, PCLN, ) -- I might consider paying for a
higher priced stock option (Over the $3.00 range), because
there will generally be much more price movement with these type of
companies.
Next, you have to
plan your timeframe for buying opportunities around some type of
upcoming “planned event”, such as the earnings announcement
timeframe or some type of special event the company plans to
participate in such as Business Conferences or Tech Conferences. The probability of “Price movement”
ahead of these type of events greatly
increases your chance of making a significant profit if you buy into
a low-cost position ahead of the event. That’s where you have the
best chance of making money consistently with relatively low
investment cost.
Whether you want to
buy “Call Options” (planning for the share price to move higher), or
“Put Options” (planning for the share price to move lower) you must “plan
ahead” and try to anticipate where the stock price will be in the
next few days, weeks or month. This is where you can make significant
gains buying low-cost stock options and waiting for the market to
move in your favor ahead of the earnings news. Also, take into considerations
what’s currently going on with the economy. If the overall stock
market is trending lower, you may need to wait a day or so to see if
the price continues to go lower before you buy – and you’ll get a
better price – but at least have a price in mind that you are comfortable
paying! When the market starts to move higher, you will be
ready!
“Planning, “Research” (researching your
information to find good opportunities) and “Timing” are
the keys to making a good decision to buy stock options (and which
stock options to buy). Once
you have everything setup, looking for good stock option
opportunities will be the main activity to concentrate on.
I have posted a
section on my website with examples of some previous low-cost stock
options in top quality companies.
It’s a “Free Online Workshop”!
Click
Here! to see real examples of
some low-cost stock options that turned into nice profits gains. That’s
why I look to buy the “Stock Options” instead of the actual
shares. These
same examples will occur again over the next earnings time frames for
these companies – that’s when you will have another opportunity to
plan ahead and look for “low-cost” stock options ahead of earnings or
any special upcoming events.
Now that you’ve seen
these examples of how to find low cost stock options – the one thing
you will need is an easy way to calculate these types of costs and
projected profits.
You need to have a
good, simple, easy to use stock price calculation program that
quickly performs all of your potential price calculation scenarios so
you will see first-hand what your projected costs, percentages, gains
or potential loss would be before you place your buy
transactions. My Stock
Calculation Program is an excellent tool to handle all of your stock
price calculations quickly and easily.
You can take the
7-day FREE Trial (with no cost) to play with the calculation tools,
then order your full version copy to have for a complete program of
tools for all your future buy opportunities. Click here! To
see all of the Software Program Advantages!
If you have not taken the 7-Day Free Trial! Download your free
copy today -- play around with some calculations and see how much
simpler the program makes all of your cost, profit and exit planning
calculations.
See the
7-Day Free Trial link on
the homepage!
www.newstocksoftware.com
If you
have any questions or need some “one-on-one” guidance to help with
your research and planning, let me know – I’ll respond as quickly as
I can!!!!
To
your success!
Jimmie V. Smith
markettrading@juno.com
Copyright
2011 Market Trading Technologies
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