How To Invest

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How Oil Supply Data Informs Traders

Oil supply data became a central report outside of the oil markets in 2004 and 2005 as the price of crude oil soared to record highs after the war in Iraq. [more…]

How to Use Straddles in Futures and Options Trading

In advance of the release of a big economic report, you can set up a straddle. This strategy is simple to execute and the financial move can be quite profitable. [more…]

Factors to Consider When Using Straddles

You can create a straddle when you simultaneously buy a put and a call for the same stock at the same strike price and of the same duration. Keep in mind that there are some important factors that you [more…]

Trading on Margin Basics for Futures and Options

Margin is what makes futures trading so attractive, because it adds leverage to futures contract trades. The downside is that if you don’t understand how trading on a margin works, you can take on some [more…]

Are You Prepared to Trade in Options?

If you’re thinking about options trading, you'd be wise to consider the following facts before you take the financial plunge. You can then decide whether to include options in your trading platform. [more…]

What’s the Difference between Stocks and Options?

Just like stocks and futures contracts, options are securities that are subject to binding agreements. The key is that options give you the right to buy or sell an underlying security or asset, without [more…]

How a Call Option Trade Works

You can think of a call option as a bet that the underlying asset is going to rise in value. The following example illustrates how a call option trade works. [more…]

How a Put Option Trade Works

Put options are bets that the price of the underlying asset is going to fall. Puts are excellent trading instruments when you’re trying to guard against losses in stock, futures contracts, or commodities [more…]

What Is the Purpose of Writing Calls?

When you write a call, you sell someone the right to buy an underlying stock from you at a strike price that’s specified by the option series. As the writer, you are now [more…]

What to Do before You Write a Call

When you write calls, think of your stock and your option as two different parts of one single position. Each part has its own role to play and is dependent on the other to perform a complete job for your [more…]

Protecting Your Stock Trade by Diversification

A diversification strategy is pretty simple, and it works best when you own more than a couple hundred shares of a stock. In this strategy, you sell more than one covered call at different strike prices [more…]

Following Up after Writing a Call in an Options Trade

Your job as an options trader starts when you make the transaction. The heavy lifting is what lies ahead, during the follow-up — managing the position, which is more difficult in some ways than opening [more…]

What Is Call Buying in Stock Trading?

Call buying is different from call writing, because it isn’t usually used by traders as a hedge against risk. Instead, call buying is used to make money on stocks that are likely to go up in price. [more…]

How to Calculate the Break-Even Price for Calls and Puts

Before you buy any call or put option in your stock trading adventures, you must calculate the break-even price. Here's the formula to figure out if your trade has potential for a profit: [more…]

How to Use Delta to Time Call-Buying Decisions

You can use delta to time your call buying. Delta measures the amount by which the price of a call option will change, up and down, every time the underlying stock moves 1 point. [more…]

Following Up after Buying a Call Option

If you haven’t dealt with call options before, you need to be aware of a few ground rules. Here’s what you should do after you buy a call option: [more…]

What to Consider When Buying Put Options in Stock Trading

When you buy a put option, you’re hoping that the price of the underlying stock falls. You make money with puts when the price of the option rises, or when you exercise the option to buy the stock at a [more…]

Basic Strategies for Buying and Selling Puts in Stock Trading

Put options are bets that the price of the underlying asset is going to fall. Puts are excellent trading instruments when you’re trying to guard against losses in stocks, futures contracts, or commodities [more…]

Creating Straddles and Strangles in Stock Trading

You can create a straddle when you simultaneously buy a put and a call for the same stock at the same strike price and of the same duration. You build a [more…]

What Are Commodities?

Put simply, commodities are the raw materials humans use to create a livable world. Humans use energy to sustain themselves, metals to build weapons and tools, and agricultural products to feed themselves [more…]

What Energy Investments Are Available?

Energy has always been indispensable for human survival and also makes for a great investment. Energy, whether fossil fuels or renewable energy sources, has attracted a lot of attention from investors [more…]

Gold, Silver, and More: Metals as Investing Options

Investors that incorporate metals into their portfolios often are able to generate significant returns. Here are the major metals that may make up a profitable part of your diversified investments: [more…]

Investing in Agricultural Products

Food is the most essential element of human life, and the production of food presents solid investment opportunities. You can invest in the agricultural sector, in everything from coffee and orange juice [more…]

Futures Markets Tricky Trading for Personal Investing

In the futures markets, individuals, institutions, and sometimes governments transact with each other for price hedging and speculating purposes. Although commercial users are the main players in the futures [more…]

Investing in Processing Natural Resources through Equity Markets

Although the futures markets offer the most direct gateway to the commodities markets, the equity markets enable you to invest in companies that specialize in the production, transformation, and distribution [more…]

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