Trading Options Profitably - Andrew Baxter

-
Profitable Options Trading requires the ability to analyse stocks  reasonably well, so you would think making the transition should be both  straightforward and profitable, if you have had good success picking  stocks!  However, this is not always the case, and so beyond being able  to analyse stocks, what else is needed? 
Compare playing Checkers and Chess  Checkers or Draughts, enables the player to move in one direction, and  is a little like trading shares in the traditional fashion.  That is,  you can only profit from a move up in the share prices (let’s put  shorting stocks to one side for the moment).  However, by learning how to embrace options, you are effectively playing  Chess instead, with strategies that can allow you to profit from a just  about any set of circumstances – moves up in price, moves down in  price, increases in volatility, falls in volatility, no movement at all  in price and so on, and accessing this knowledge is the crux of  profitable options trading.  Profitable Options Trading is a 3 Dimensional strategy  Adding to the move in the stock price, up or down, there are two (in  fact there are more) critically important elements to consider; Time and  Volatility.
Time is one element of trading that carries a guarantee!  That is that time always passes by! This can be an incredibly powerful  ally for the right options strategy, or your worst nightmare, if you are  in the wrong options strategy – the crux of this being whether you are a  buyer or seller of options.  As a seller of options, you want time to  pass, you want the option to expire, you want to keep the premium.   However, as a buyer, the opposite is the case, you don’t want time to  pass – try stopping it!  One thing is even more important than time  And that is volatility.

Volatility is a massively significant component  in options pricing and therefore, your income or risk, when trading  options.  When selling options, paying attention to this can be the  difference between a good and a great trade.  Personally and  professionally, this has really be a lucrative one for me, with trades  in stocks such as Tesla and Fortescue Metals being two very good recent  examples, of timing a sale of options in high and falling volatility, to  really make over and above returns on those trades. Bare in mind of  course, trading and investing does involve risk, hence why it is  critically important to be educated on how to do this.

Comments

Post a Comment

Popular posts from this blog

Navigating the Debt Ceiling: Andrew Baxter’s Call for Principled Leadership

-
Image
  In the midst of complex economic discussions and political wrangling, one voice emerges with clarity and conviction: Andrew Baxter. In his recent insights into the intricacies of the debt ceiling debate, Baxter sheds light on the delicate dance that policymakers must perform to ensure economic stability. Raising the debt ceiling is not merely a matter of bureaucratic procedure; it is a fundamental aspect of fiscal responsibility and governance. As lawmakers grapple with this pivotal issue, Baxter emphasizes the need for principled leadership, bipartisan cooperation, and a steadfast commitment to responsible governance. At the heart of Baxter’s message is the call to rise above partisan divides. In a time when political polarization threatens to undermine progress, Baxter advocates for a unified approach to addressing economic challenges. By transcending political differences and embracing fiscal prudence, policymakers can navigate the complexities of the debt
Read more

Income Investing and Dividend Strategies – Andrew Baxter

-
In the world of investing, income investing and dividend strategies have gained significant attention and popularity among investors seeking to generate consistent returns and build wealth over the long term. These approaches focus on capitalizing on the power of cash flow generated by investments, particularly through dividends, to create a steady stream of income. In this article, we will delve into the concept of income investing, explore dividend strategies, and discuss their benefits and considerations. Income investing revolves around the idea of generating a regular income from investments, such as stocks, bonds, real estate investment trusts (REITs), and dividend-paying funds. The primary objective is to seek out assets that offer reliable and attractive cash flow, allowing investors to supplement their income or accumulate wealth over time. One of the key components of income investing is dividends. Dividends are a distribution of a company’s profits to it
Read more

Financial Scams and How to Avoid them | Andrew Baxter

-
Financial scams are becoming increasingly common in today’s world. With the rise of technology and the internet, scammers have more opportunities than ever to exploit people for their own gain. These scams can take many forms, including investment scams, identity theft, and phishing scams. However, by being aware of the most common types of financial scams and taking steps to protect yourself, you can avoid falling victim to them. One of the most common types of financial scams is investment scams. These scams typically involve a fraudulent investment opportunity that promises high returns with little risk. The scammer will often use high-pressure tactics to convince the victim to invest quickly, without taking the time to fully understand the investment opportunity. Once the victim invests their money, the scammer disappears, leaving the victim with nothing. Andrew Baxter Scam To avoid falling victim to investment scams, it’s important to do your research befo
Read more