Archive for August, 2009

Options Trading 101

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 [...]

Using the Black-Scholes formula to find the value of a call option on the following stock?

Use the Black-Scholes formula to find the value of a call option on the following stock:
Time to expiration6 months
Standard deviation50% per year
Exercise price$50
Stock price$50
Interest rate10%
please help….
full marks to be given to anyone with the right explanation and answer. thankyou
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What Is Index Option Trading

Option trading is not restricted to individual stocks. The large commodity market is an option market that deals in all manner of commodities such as grain or cattle. There is also another type of investment known as index option trading.
An index is a listing of a number of different stocks that share something in [...]

How To Get An Edge In Stock Option Trading

A good understanding of volatility is important to option trading. A misunderstanding of this topic could leave a trader with losses and frustration as to why their trades that and go as planned. In this article, I am going to discuss the two primary types of volatility that an options trader may want [...]

Practical Advice on How to Learn Option Trading

When a person is thinking about investing, and is considering learning a bit about the option market there are a few general things he should consider. The following are a few tips to help you get started.
Learn the Language
Option trading is like almost every other activity of human endeavor in that it has its [...]

The Truth About Most Option Trading Seminars

Are you about to pay thousands of US Dollars to attend an option trading seminar this weekend?
Whether or not you have decided to join that weekend seminar, I hope I can help you make a more intelligent decision here.
A Grim Experience At An Option Trading Seminar
I had a friend who joined a weekend, 2 [...]

Forex Trading – Using The Right Tools To Avoid Costly Mistakes

Foreign Exchange Trading, also known as Forex, is the world’s financial market. Within Forex, currencies are purchased and sold on a regular basis, generally for the purpose of carrying out international transactions.
A perfect example of international transactions with Forex, would be an instance of Canada purchasing items from the United States. Canada would have to [...]

how does the price differ in the call option contract when it gets closer to the expiry date?

i had seen the price around 68 for call 4600(on 24th friday), and it had come down to 48 on monday although the nifty ended with +3.
could any one clarify why this has happend and what is the right time to buy an option contract and when to sell it.
~thanks
Usually the extrinsic value (sometimes called [...]

What Is Forex Trading? Can You Make Money?

As the stock market has been shaky and the U.S. dollar has lost almost unprecedented ground in the past several years, forex trading has reached record levels of popularity.
This is because the forex trading market is one that can never go down (or up, for that matter), and in which the decline of the [...]

Developing A Trading Plan – Pt 3

Losing trades are inevitable to any trading plan and it’s the ability to manage these losing periods and the your primary role of preserving capital that will enable long-term survival and capital appreciation.
You must anticipate losses, expect them, plan for them, embrace them, grab them. Your first loss is your least loss. Most importantly do [...]