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Options explained. What is it? Let's use an example. Say, you came to the store to buy some vegetables and suddenly saw the audio system of your dreams. Now, in the perfect world you would just take it. But in the real world you a) have no money at the moment and b) have a spouse that must approve first. So you are asking the store owner to hold the audio system and not to sell it to anyone until you go home, resolve the real world problems and return with money. And the store owner says "no". Because from his point of view it is a financial risk you are asking him to take. What if the real world problems will not be resolved? What if you will not come back with money? And then you are bribing him. Here. Take this twenty dollars. If I come back, you count this money as part of the payment. And if you don't? - the store owner still isn't sure that it isn't a trick. - And if not, you keep this money. OK, the store owner says. For this money the audio system will be "on hold" for one day. That's it. For a small (or large) deposit you just bought yourself an option (a right) to buy the audio system. Why do we need options? There are few benefits in using options or similar techniques. The reason described above (I have no money but I expect to have them) is not the most important one. You can use options to guarantee the price of a purchase. Say, you are buying a house. And the price is 100,000 and naturally you don't have them. But you are sure that you can - if you go to your bank and take a loan. But what if the moment you leave, the other guy walks in and offers 120,000? To avoid this situation you can offer the house owner to SELL YOU an option to buy this house within some fixed period of time (day, week, month, 6 month) for some amount of money (one dollar, 200 dollars, 1,000 dollars). You put it in writing and your price is GUARANTEED. And then the real estate market goes down and the house is now $90,000... So you can abandon the option - you don't have to buy anything! Or better - you can make another offer to the same seller! So it is a technique to profit from the price moves with the little risk! Think about the house example above. If you expect that the real estate market is about to go up, you would like to buy a house NOW. But if the market go down instead - you loose a lot of money. However if instead of buying the $100,000 house you buy the $1000 option... You will loose much less and you will win (if price go up) the same. No. Not the same. Say, the house price went up from 100,000 to 120,000 dollars. The profit is 20,000 and it means 20% if you paid 100,000 dollars. OR if you only paid $1000 for the option, then it will be 2,000 percent! Stock market. Of course, the situation with the house that I described above is not very realistic. There are options in real estate, and a lot of them, but they are slightly different and I am only going to talk about stock options here. Because on the stock market options work EXACTLY as I described. It is called a leverage. Once again: for the small downpayment you can buy the right to buy or to sell stocks at the FIXED price. All you need to do is to research the stock and to decide (for yourself) which way will it change. Then you buy or sell options. For stocks the options are going in LOTS, 100 shares in each lot. The right to buy shares of the stock at fixed price within fixed period of time (1, 2, ... months) is called an option to buy. If you want this right, you need to BUY A CALL. If you want to sell shares at the fixed price (you believe they are doing down) then you need to SELL A CALL, which means that you promice to someone (the person who buy it from you) that you will SELL these stocks at a fixed price if he ask (if you GET CALLED). Now, there is a risk - what if you sell a call for one lot (100 shares) at 100 dollars and the stock dropped to $1 per share? To COVER for this risk, you might WRITE A COVERED CALL. It means that you HAVE the stock on your trading account, so that you don't have to buy it for $100 in order to give it away for $1. How can we use this technique to profit from it? Let's say we have a Microsoft shares (MSFT). 100 of them. We believe it will not go up dramatically, but it is not going to fall either. We write a covered call for one month for one lot. It means that we cannot sell the MSFT during one month - they are kind of a security deposit. Now for this action we IMMEDIATELY get some money - the price of an option. This is ours and no one will take them from us. Then month later one of two things will happen - MSFT may grow above the price that you wrote a call for (say you wrote a call for $100 and it is now $103), so you get a call from the other person and your shares are his shares now. You have $100/share that he pays you AND the price of the option that you got at the beginning. Or if the MSFT didn't grow (just as you expected) you keep the shares AND the price you was paid for the call. And you can sell same shares again! And again. Terminology. Let's get clear with the terminology. If you want to have the right to buy - it is called buying a call. If you want to sell the right to buy (from you) to someone else it would be selling a call. Now if you want to have the right to sell, it is buying a PUT, and if you want to give someone the right to sell (to you) - you are selling a put. Risks. The more reward, the more the risk. Options are using large leverages (5-10 times of your money) and the risk is higher. Say, you bought a call for 1 lot for $100. As time goes, the stock price remains at $99.99 - then what exactly will you have at the end of the period (the date an option expires)? Nothing. You will lose all money! On the other side, if you paid $5 for share to buy this option and price went up one dollar, you will get (estimation only) $100 as a profit which is 100 / 500 = 20% profit on 1% price change! How do you trade options? First, you need the "option trading account" with your broker. Then you need to buy and sell options. In most cases (unless you use options to actually ges shares) you don't need to buy and sell underlying securities - you are only trading options. That's it. Books to read. Trere are few books on options you might want to read BEFORE you go out there. Also pick any trading books you can. Free Stock trading Course The course consists of five E.mails and covers all essentials of Technical Analysis approach to Stock Trading. 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Keywords: review software stock trading The Stock Downloader program allows you to automatically download free live stock quote files from the yahoo historical stock quote server. Both historical intraday stock data and yahoo historical stock quote files can be downloaded. day trading e book A free e.mail trading course containing 5 e.mails with stock day trading tip information is available from this site. In this e.mails, the basics of computer system trading is covered. The links in the left column can be used as a day trading tutorial, containing multiple day trading how to stock day trading tips for the technical investment analysis. atr breakout This article covers the Advanced True Range indicator. It includes the basic information, formulas and an example case study. investing quote stock This site offers tutorials for both day profit trading and day end trading. Software available for downloading includes stock downloader for historical intraday data and yahoo historical stock quote files with day end quotes. archive quote stock The yahoo historical stock quote archives can be downloaded from the Internet automatically using the Stock Downloader software. current quote stock yahoo Yahoo server provides stock market quote historical data, available for downloading from the Internet as CSV (comma separated) files. These files are updated daily, after the markets close. Yahoo server also provides 15 minutes delayed intraday quotes that can be downloaded by the Stock Downloader as they appear online. commodity market system trading The tutorials available from this site can be used for online day trading education. The Trader trading simulator can produce trading signals based on the indicators. You can use indicators, that come with the program, or create your own using Trader's built-in scripting language. stock trend chart The Trader trading simulator is an example of chart pattern recognition software - it can detect price trends, plot them and use them to generate trading signals. stock day trading tip The trading course, available as five e.mails contains trading tips and well-known (but mostly ignored) common sence trading rules. sp 500 trading system To create your own indicators, for example, as part of sp 500 trading system, use Trader's built-in scripting language. The language resembles the Basic, and gives you the access to many functions, such as convergence divergence test, chart pattern recognition, point figure charting and much more. historical market quote stock Use the Stock Downloader to download both intraday and day end stock quotes from the Yahoo stock server. The program provides you with high degree of flexibility, it is designed in such way, that you can leave it unattended for extended periods of time (months). history market quote stock Historical quotes available from the yahoo historical stock quote server are adjusted for splits. The split files are available together with the stock quotes. However, downloading them is a much more difficult task. The Stock Downloader will take care of it for you. free system trading Use the Stock Downloader together with the Trader program, to download free stock quotes and produce trading signals. On this site you will find tutorials about stock trading, that will help you to buils your own trading systems. day profit trading The day trading uses the last moment information, and decisions have to be made FAST. That's why we use computers to make automatic decisions. To do a successfull day living trading, you will need to practice on some kind of sample data first. This data can be obtained using the Stock Downloader program. Note, that the quotes on Yahoo server are 15 minutes delayed. day living trading Can the day trading be profitable for you, and not just for your broker? Read our trading course to learn the common sence tips and tricks. convergence divergence test When two lines come closer, it is called convergence. When they go in the opposite directions (one up, one down) - it is a divergence. The thing is - the convergence / divergence test usually works faster than the convergence divergence indicator itself, providing predictive signals. historical intraday stock data When you use the Stock Downloader to get the intraday data, you will be connected to the Yahoo server. The 15 minutes delayed data are extracted from the Yahoo pages, together with the split information, if any. definition ppo This article covers the Percenmtage Price Oscillator indicator. It includes the basic information, formulas and an example case study. formula macd MACD stands for the Moving Average Convergence Divergence. As you can guess from the title, the moving averages are calculated for the stock price, and the points of their intersections are used as trading signals. screen stochastic Stochastic indicators are trying to determine the buying and selling pressure. If the security is under the pressure, then sooner or later the price will adjust. Mostly, these are range indicators. real time day trading signal The stock quotes from the Yahoo stock server are 15 minutes delayed. You can take this fact into consideration whan creating your own trading system, or simply use the downloaded data to learn the technical investment analysis before doing "the real thing". downloader stock The Stock Downloader is a program that uses Yahoo stock server to download stock quotes. It will also download split information. chart pattern recognition software The Trader day trading simulation program is an example of the chart pattern recognition software. It can find the beginning and end of the price trend, and to generate trading signals using the convergence and divergence of the trendlines. wmt stock quote One of the stocks used as an example in the Trader tutorials is the WMT. free live stock quote The Stock Downloader works as a front end for any software taht can use it's files. It creates the free live stock quote files on the disk, and as the new information becomes available, appends it to these files. past stock quote The Stock Downloader makes the past stock quote information available as it will download historical quote files from the Yahoo for you. As there is no historical intraday data files at the yahoo finance stock quote server, the Stock Downloader queries Yahoo once a minute, saving the data to the historical file of its own. computer system trading There is a number of free educational files on this site, containing free information on creating the trading system using computer. historical stock quote free Historical stock quotes can be downloaded from the Yahoo using the Stock Downloader program. The downloading process is automated. day trading simulation The Trader day trading simulation program works with the indicators, providing you with the free charts, including point figure charting, trading signals and pattern analysis. download historical quote When we use the Stock Downloader to download historical quote files from the Yahoo site, we have to keep in mind, that this quotes are delayed. Normally, it is a 15 minutes delay for the intraday quotes, and up to few hours delay for the day end stocks (they update their data after the markets are closed, and it takes some time). day trading pattern Read the free online tutorials, available from our site, to learn about creating the indicators, using trading patterns. stock index trading system The index can be treated same way you treat the individual stock. You can buy it, sell it, download its quotes, and create the indicator, that takes full advantage of this particular index's behaviour. yahoo finance stock quote This service provides day end files, available for downloading. The Stock Downloader program can do it automatically for you. Also, the intraday data can be extracted from some pages on the yahoo finance stock quote server. The Stock Downloader can do this for you, too. simulator trading The Trader day trading simulation program provides you with the power of technical analysis. It performs charting, applies the indicators to produce the trading signals, and even can analyze the chart patterns. Also, you can use the predictive power of the neural networks, together with this program, as part of the custom indicators. moving average trading system The use of moving averages extends from the simple data smoothing, to the complex indicators, based on convergence, divergence and pattern analysis. On one side, the moving average is always behind. On the other side, the derived indicators can sometimes "look forward", predicting the future values. trading indicator Indicators can be used to produce trading signals. free intraday charts Use the data, obtained using Stock Downloader program, to create free intraday charts day trading simulator We strongly advice, that you use some kind of the day trading simulator, before doing the "real thing", risking the real money. intraday quotes The Stock Downloader creates two files for each stock, one with the intraday quotes, and one with the split information. technical analysis stock screen Using the Trader's built-in scripting language, you can write your own stock screen. However, try the stock screens available online, first. yahoo historical stock quote This service provides day end files, available for downloading. The Stock Downloader program can do it automatically for you. Also, the intraday data can be extracted from some pages on the yahoo finance stock quote server. The Stock Downloader can do this for you, too. macd convergence divergence This is one of the most commonly used trading indicators. It is simple, reasonably reliable and can be implemented using computers. technical indicator macd The difference between two moving averages is used to test for the buy and sell signals. point figure charting The "timeless" indicator, making possible to perform pattern analysis in a fast and elegant way. technical analysis of stock trend The Trader program has built-in functions for the trend analysis, particularly, it can check, if the trends for two lines (like MACD and price) go in the different directions. day trading techniques Read our free introductions on the trading techniques. technical analysis formula The technical analysis takes into consideration the past price history of the security. day trading tutorial Read our free introductions on the trading techniques. day trading how to Grab the stock quotes using the Stock Downloader program. macd formula MACD indicator can be used on stock price. However, it can also be applied to the other indicators, providing us with the information on the direction and speed of changes. trading system Usually, one indicator is not enough to build a complete trading system. You need at least momentum indicator, stochastic indicator and stop criteria. historical intraday data When downloading the historical intraday data, you may leave the Stock Downloader unattended for couple of months. It will keep the system clock correct, reboot, if you select this option, and reconnect to the Internet at the beginning of the trading session. technical investment analysis The technical investment analysis doe not care about company - all it uses is the stock price history. online day trading education Subscribe to our 5 e.mails trading course day trading faq Check them, before spending any money. stock market quote historical Historical quotes can be downloaded for you automatically with the Stock Downloader program. trading course Subscribe to our 5 e.mails trading course historical daily stock quote There are many online sources, offering historical daily stock quotes. You need, however, to be aware of possible problems with data, some providers offer, such as gaps, spikes etc. free real time streaming stock quote There are also providers, offering free real time streaming stock quotes. Usually it comes with the "free trial" of their software packages. Some of these sources are reliable and accurate enough. day profit trading Day trading is at the borderline between profit and risk. Some people say it is impossible to consistently win at such short time frame, while some other say - it is. previous stock quote You can not possibly trade based only on thecurrent stock price. You need to analyze the history, at least, the previous stock price. Quote history should be always at hand. ppo software There are some companies, offering it. We do not have enough experience in that area. current quote stock yahoo Yahoo is one of the most known public data providers. Both current stock quotes, and stock history is available on most securities. archive quote stock It has to be mentioned, that stock quote archives, available online, are often of very high quality. Sometimes you may see them offered for a fee, usually, it means minute time frame and large (> 600 mb) amount of data. historical market quote stock Both historical stock quotes and last minute market information should be studied, as any trading system may produce errors, and it is the last minute information, that allows us to catch them. review software stock trading Stock and Forex trading software does not necessarily have to be expansive. As many reviews suggest, the most convenient packages include "free time unlimited demo account", and free trading client as well. A good example is www.metaquotes.net - a company, that has one of the best FOREX trading platforms, which is completely free. stock trend chart Stock prices move in trends, which can be analyzed on charts. This is one of the cornerstones of technical analysis. quick quote stock The time delay is inacceptable, when you do intraday trading. There are many data providers, offering free or almost free stock quotes, without a delay. day living trading Can you live off the day trading? There are many examples, supporting this point of view, however, it seems that most of the day traders loose. history market quote stock There are many reviews available on the history of the stock market. Some of them are based on the Dow theory, some - on the waves, and so on. sp 500 trading system SP 500 is an index, and as such, it contains much less noise. It makes it a perfect trading instrument, and you can use all tools from the technical and fundamental analysis. formula macd MACD indicator is described in details, with formulas, Cortex scripting code and charts, on this site, in the corresponding article. free system trading There are many trading forums online, and almost all of them offer free trading systems. Some of them are half-tested, while some are market-ready. stock day trading tip The most important day trading tip is to learn as much as you can, before you risk your money, rather than start as soon as you can. commodity market system trading The trading - in any market, including commodity market - requires a system. It means you need to know in advance, what to do in any situation, so that you don't have to waste time, desiding. definition ppo See online sources. best system trading What trading system is the best? As trading is a balance between the risk and the reward, the best system is case-dependent. It is up to you to figure out your risk tolerance. investing quote stock Using stock quotes to trade as a mean of an investment is not a single approach, but rather many different approaches, involving different methods of analysis, and different paradigmas. free software stock trading It is our belief, that a trading platform must be free. Only this way, the trader can get used to it before he invests. day trading tool As an example of a day trading tool, consider a MetaTrader. Note: this site does not represent MT. We just like the tool. free live stock quote The situation with free live stock quotes is constantly changing to the best. To find the best available offer, do a research on the Internet trading forums. free streaming stock quote When you do a day end trading, you don't need a streaming data feed. However, it is required for intraday. stochastic definition On this site, you will find both the definition of stochastic indicator, and the source code to implement it. simulator trading There are some fine simulators available free of charge, one example is a MetaTrader. However, a real time trading is always different, and the difference is often to the worse. wmt stock quote See finance.yahoo.com day trading simulation As an example, consider MetaTrader simulator. It emulates intraday ticks, creating reasonably accurate testing environment. day trading pattern Patterns are widely used in day trading, as the matter of fact, as price charts are fractal, any time frame can benefit from this approach. stock quote download Stock quotes can be downloaded from Yahoo (one possible way to automate this task is to use a free script that comes with Cortex). historical stock quote free Yahoo is probably the first thing that comes to mind, unless you need something very specific. download historical quote To download, simply go to their site, enter the ticket and select the time frame. stock index trading system Indexes are similar to the stocks, exept two things. First, thei have much less "noise". Second, the liquidity is much better. So by all means, they are good instruments. current own quote stock yahoo Yahoo is a well known stock quotes provider, they are delayed, though. yahoo finance stock quote Also, day end information at Yahoo is delayed, too. past stock quote Historical (past) stock quotes are used for technical analysis. day trading simulator Simulators can be used to test day trading systems, however, nothing can replace a real time demo account. free stock trading system There are many stock trading systems in the Internet, available free of charge. best stock trading system The best stock trading system is the one that suits your risk - reward ideas. stock trading simulator There are many stock trading simulators available online, some of them are free. yahoo stock quote Yahoo stock quote is one of the well known and reliable free services. historical stock quote Historical stock quotes can be obtaines from many sources, from free Yahoo, to commercial Reuters. trading indicator There are many trading indicators, available on this site. It includes both the description, and the source code.