The first step is to decide if you need a full-service online stock trading brokerage or a discount service. Full-service brokers have their time and place but note that in the current competitive environment discount brokerage services tend to offer almost the same facilities as full-service firms. Make sure that you weigh all options before deciding which one is right for you.

You will be able to determine what resources are available, including research and help in making decisions, as well as the timeliness of the trades you may want to make. You will need to determine if the quotes on the site are in real time or delayed. Some online stock trading sites offer delayed quotes with which the price you buy or sell a particular stock may be different at the time of your transaction.

Accepting open orders is also important if you expect a price fluctuation throughout the day. For example, the ability to put in a buy order for a set number of stocks, if the price falls to a certain amount could be important to you later on. The same would be for a sell order placed with an stock trading website online. You want to make the deal but only if the price is what you specify.

Service Justify Trading Costs

By looking through an online stock trading site you can determine if the costs of making trades through the brokerage is worth the service they are offering. With competition really heated among the many online brokerage sites, prices have dropped considerably with many offering trade rates of $9.95 or less. Some sites offer one-and-a-half percent rate, with a maximum of $9.95. There is some full-service online stock trading sites that are part of a large brick-and-mortar brokerage that charge up to $30 per trade, justifying the charge by the myriad of services offered.

Be prepared, however as that per trade cost is for both ways of the deal. You will be charged when you buy the stock and you are charged again when you sell it. Each separate stock bought or sold is considered one transaction, even if you put the orders in at the same time. For example, you submit an order to purchase ten shares of each, of three different stocks, you will be charged the trade cost, times three. When you sell those three company’s stocks, you are charged again, whether you made money or not.

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There are differentiating features to options and features contracts. This article will detail those dissimilarities to assist the investor in avoiding the wrong terminology. Hopefully, the information will help prevent mistakes and increase profitability.

Options Contract

An options contract is binding for a specified period of time. An option provides the investor with the right to purchase or sell a certain number of stocks, currencies values or commodities. The investor is not obligated to exercise the rights obtained through the contract. The investor is restricted to buying and selling the commodities at a fixed price.

Futures Contract

A futures contract requires that the rights obtained by the investor be exercised. Delivery of the stock, currency or commodity must be made. The delivery of the trade is made by a fixed price and must be done on or before the expiration date of the contract.

All conditions must be exercised in a futures contract wherein, in an options contract, the investor has the capacity to decide whether to exercise the conditions.

Options and Futures Differences

Besides the basic differences between options contract and futures contracts regarding rights and obligations, there are several other distinctions between the two. These include commissions, amount of underlying stock or commodities and the manner in which gains are realized.

An investor can sign into a futures contract without full payment upfront, whereas the investor must pay a premium to the contract holder before taking hold of an options contract. This option premium is payment in consideration for the investor’s right not to be obligated to purchase underlying commodities. This is of importance when there have been unfavorable price changes.

Trades of the size of underlying commodities is another major disparity between options and futures contracts. Futures usually have larger sizes than options. Because futures have larger sizes, it is riskier for an investor to trade as he exposes himself to a far greater loss.

The final deviation between the two agreements is realization of gains. Gains in options contracts are realized by one of three methods. The investor can exercise his option, buy a completely different option or collect the difference between the price for the asset and strike price on the expiration date. Holders of future contracts are only able to realize profits by an opposition position or at the finish of each trading day through the instant change in the value of positions.

Learning the specifics of options contracts and futures contracts, and understanding how each operates, will assist the investor in avoiding making mistakes that can have profound effects. Always conduct research prior to trading. Know the rights and obligations of the particular contract you are committing to, the amount of commissions payable, the size of underlying commodities you are exposing yourself to and how realization of gains are permitted.

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Here are five simple tips for debt relief during worrisome talks of an impending recession:

1. Reduce Your Personal Debt

While you really can’t reduce larger debts like your mortgage, unless you’re in the position to refinance and doing so would benefit your situation, or your car loan payments, you can do something about your credit cards. If you’re a customer in good standing, call each of your creditors and ask what can be done to either reduce the amount of your monthly bills, or get them paid down faster.

If, perhaps, you have two credit cards with a ridiculous interest rate and were offered another card with a zero percent introductory rate as well as no charge for balance transfers, consider the offer and pay the card off as soon as possible while closing the first two.

2. Evaluate Your Spending

Much like creating a budget, realistically evaluating your spending is something you must do to protect yourself and relieve some of your debt. Although everyone needs to unwind and relax, are you and your family spending a bit too much on entertainment? What about eating at restaurants or ordering out? Could you be buying the generic versions of some products? Are your family’s birthday and holiday celebrations way out of control?

Honestly go through a mental calendar month by month, writing down all of the unavoidable expenses and seriously reevaluating the rest.

3. Learn a New Skill

Protect yourself in these trying times by learning a new skill and expand your horizons, and your ability to earn money. This doesn’t mean you have to completely change careers, but rather hone your existing skills or learn a few new ones that will keep you up-to-date and marketable.

Do you have a hobby that you truly love and could turn it into a moneymaker? Or, perhaps you could take a few classes at the local community college, either on campus or online at your own convenience.

4. Don’t Shy Away from the Stock Market

All bad things must come to an end, and the stock market is certainly no different. If you happen to have some extra money set aside, consider investing in a company you know will be around in years to come.

This isn’t to say you should mortgage your house and buy up thousands of dollars in stocks, but rather a small investment that will hopefully grow and earn dividends when the market turns in the other direction.

5. Contribute to a Retirement Plan

It’s never too early, or too late, to start planning for your future and your retirement. Many companies have 401k retirement plans where employees contribute and the employer matches or contributes a percentage to their fund.

It’s best to pretend this money doesn’t even exist until you do actually retire as there are hefty penalties for early withdrawals, not to mention this would be setting yourself back further.

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The best trading newsletters encompass all the fundamentals of great trading in their service that in turn helps you form top-notch trading habits. Besides making money, forming great trading habits taught by professional trading newsletters (and not all newsletters are taught by professional traders) can be one of the most valuable things you pick up from your subscriptions.

And just for the record stock trading newsletters or option trading newsletters are also called stock trading advisories or option trading advisories, or stock pick newsletters, option pick newsletters, stock trading membership site or option trading membership site etc. you get the picture.

The question is, “How do you find a good Options trading newsletter or Stock trading newsletter?”

Well first all, what kind of trading style do you want to trade? Here are the varieties that are available:

- Swing trading stocks and options

- Intraday trading stocks

- Pivot point position trading on stocks and options that aim for explosive five day to one month moves with well-defined stop losses

- Trend trading that takes advantage of two to four week trends and three to six month trends – trading stocks and trading options

- Then you have the various options strategies, complex option combinations, credit spreads, covered calls etc.

The best services first focus on stock price movement. These top-performing services combine technical analysis, chart pattern set ups, anticipation of opportunities on the charts in addition to combining other price motivational factors such as earnings season cycles, stocks splits, seasonal runs, trends of the indices etc.

The best services have a decent track record. That said don’t get too caught up in a track record because some services may fake their track record. Bottom-line is that the philosophy of the service must make sense and must meet common sense. In other words their approach to capturing trading profits must make sense. Ultimately, if you like what you see, the best test will be to take a trial and paper trade their service. Don’t use real money but pretend like you’re trading in real time with real money.

When you’re testing a stock trading newsletter or option trading newsletter make sure you give it a fair shot. Remember, once you find a good service that service could make you a lot of money. In fact, through known acquaintances that wish to remain anonymous, some subscribers to certain newsletters say they have made millions of dollars trading stocks and options through those particular newsletter trading ideas. So keep positive about the potential of some of these trading newsletters. There are actually good newsletters out there.

Really, the key to finding your Stock trading or option trading newsletter ‘golden goose’ that lays the ‘golden eggs’, is to search in the search engines, search through blogs, forums and review sites. Often when you read review, that person may be a little biased because they may be promoting a particular newsletters affiliate program but it’s worth checking out. Additionally there are many advisories listed in trader magazines you’ll find in your local bookstore.

The bottom line is that you see something that looks interesting you must give it a shot. Don’t trip over pennies on your way to thousands of dollars. If something looks good sign up, receive their updates and paper trade. This way we’ll be doing complete research and you won’t leave behind something that could have even provided you financial freedom.

Paper trading, which is pretending that you are really trading but without the use of real money, is definitely the best way to get started with any trading service, especially if it is in active trading service. Using real money can cloud your judgment because real money pulls strong emotions into your evaluations.

Start doing your research for your ‘golden goose’ stock trading newsletter or options trading newsletter today. Imagine the possibilities if you find one!

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Selling Covered Calls is a strategy in which an investor sells a call option contract while at the same time owning an equivalent number of shares in the underlying stock. It is considered to be one of the safest option strategies in the market. Typically it is performed over a short term period of time, since option contracts always have a finite lifespan. The typical strike price at which call options are sold is normally above the current price at which the stock is trading. Thus, if Pepsi stock is trading at 70, its shareholders could sell a covered call at $75 strike. Risks Of Selling Call Options

The economic incentive for the seller for writing a covered call is that he collects options premium, which increases his income from the stock he owns. With the passage of time, the time value portion of the option’s premium generally decreases – a positive effect for an investor with a short option position. In addition to that, the stockholder still owns the stock after he writes a call. So they continue to collect all dividends paid as long as the option is not exercised!

This strategy is most profitable when stocks trade in a range and as a result the call option expires worthless. Thus an investor who can correctly predict that a stock would not experience significant price swings over a certain period in the future, could achieve extraordinary results over time. Investors are also always free to purchase the covered call back from the market at any time if they change their opinion on the direction of the stock price. Even if stock prices decline after a covered call has been written, the investor is still better off, because their losses are smaller due to the options premium collected. If the option expires worthless or is sold profitably and the investor still owns the underlying, they can generate more income by selling more covered calls.

Selling Covered Calls sounds appealing at first, because theoretically one could get two passive income streams from one stock. There are some risks with this strategy though, which might make it less appealing to investors.

First, if the stock price rises above the strike price at which the call was written, one would not be able to participate in any upside gains in the stock, because they are required to sell it to the call buyer to whom the call option was written in the first place. The only scenario in which the investor will keep the stock and the premium is when the stock price does not increase above their strike price. This strategy seems inferior because it assumes that investors could time the market by betting whether or not the stock would be above/below the strike price at expiration. Studies have shown that investors are pretty bad at timing the markets, because the majority always seems to be selling at the bottom and buying at the top. The strategy also seems inferior because by writing covered calls stockholders are limiting their upside potential, while leaving their downside wide open. You are selling your rising stocks and keeping your losers, while earning some income in the process, which in reality is eroding your capital gains. The psychological weak points of this strategy is that most investors always believe that their stocks would be rising over time, so betting against your own portfolio in terms of covered call selling seems counterintuitive. It also does not eliminate the risk of stock ownership – if a stock declines, investors will still suffer losses, although they would be a little lower due to the premium received. Risks Of Selling Call Options

Another negative for owners of dividend stocks who sell covered calls on their holdings, is that there is always the possibility that the call holder might want to capture the stock’s dividend. In that case, the option must be exercised a day before the underlying stock’s ex-dividend date. That’s the only way for the call holder to purchase underlying shares and be eligible for the dividend. In this case, you might not receive notification that the option has been exercised until the ex-dividend date itself.

In conclusion selling covered calls on dividend stocks could theoretically provide an investor with two potential streams of income from one stock if its price does not increase above their strike price – options premium collected and dividends payments received. If the price increases, the call option will be exercised and the investor must sell his stock at a predetermined price. They won’t be able to participate in the stocks upside, unless they buy their stock back, at higher levels. Furthermore the strategy does not protect against declines in prices of the underlying. Just like any strategy involving securities there is always the opportunity for a huge profit if done correctly, or for a huge loss if done incorrectly. Thus an investor will always be better off in the long run if they took those strategies with a grain of salt and do their own due diligence before taking any action, which could impact their finances. Risks Of Selling Call Options

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Beginners in this field need to be extra careful as they can lose their hard-earned money if they make real estate investments without getting professional advice and making a thorough research. There are many strategies that can help you in making the right decisions and going for the right options.

Buying And Selling Strategy

This option enables you to make some fast cash by buying a bargain house and disposing it off to another investor. The trick lies in locating such a property and finding another real estate investor who would pay you for locating such a bargain deal.

Rental or Residual Income Strategy

This strategy enables you to get monthly income from your investment. You need to look for a property that you can obtain at a bargain value and that would fetch a good rental income. As long as you are able to get a monthly rental amount that exceeds the monthly mortgage payment, you are in business. This can prove to be a double-edged tool if you are not able to get the rent that you had anticipated or if the mortgage interest rate is high, thus escalating the monthly mortgage payment.

This option is ideal if you have a good credit rating that will enable you to get a low mortgage interest rate. Moreover, you can get good returns in a few years as the rental income moves up and the mortgage payment remains the same.

Property Investment Strategy

If you do not want to deal with tenants and your goal is to make long-term profit, you can buy a property, refurbish it and sell it at a profit. You can also buy a property, transform it and then sell it.

Apartment buildings can be transformed into condominiums and old houses can be transformed into luxury villas. You can also indulge in speculation by buying land cheaply at an undeveloped site and then waiting for the area to develop before selling it at a profit.

Flipping Option

This strategy can be used to great advantage and profit. You need to look for a property that is in a bad shape and available at a bargain price. You can then start refurbishing this property using all your creative skills and transforming it into an extremely attractive house.

The next step is to find a buyer who would be attracted by this property and who would be willing to pay you much more than what you paid for it and the refurbishing cost. However, it is necessary that you have the financial resources to go through with this process and be able to hold on to the property until such time that you are able to find the right buyer. A lot of hard work and risk of speculation is involved in this strategy.

Although, hard work is needed, knowledge will be your key to profits.

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Earnings season propelled the stock market in July, 2010 to its best month in a year, with the Dow gaining 7.1% as corporations continually shattered earnings estimates and revenue consensus. Technology (Apple, Intel), financial (Goldman Sachs, Wells Fargo), big oil (Exxon, Chevron), automotive (Ford), and most other sector heavyweights were weighing in with stellar quarterly reports. Containment of the Gulf oil spill as well as the passing grade received by 84 of the 91 European banks given the “stress test” also helped make July a winner. Options Traders Get Bearish On Moody’s

Valuation of the market at large continues to be beneath historical levels. Although corporations are turning large profit and many are flourishing, it remains to see if July was a temporary reprieve of market mediocrity or a springboard to a rally that will bring share prices in line with value. I believe that the triangular depressive forces of unemployment, housing, and debt (both European and domestic), will continue to suppress the market for sometime and keep the market undervalued. This is bad news for those currently invested in the market, however, it provides nice entry points for the long-term value investor who has the opportunity to buy company shares at a discount.

On July 30th, it was announced that the United States gross domestic product grew at 2.4% for the second quarter, a number below first quarter growth as well as analysts’ expectations. On August 6th, the Federal Labor Department will report on the national unemployment rate, currently at 9.5%. Housing reports have continually been uninspiring, and the previously mentioned European stress tests of the 91 banks have been coming under increasing scrutiny that they were lenient and ultimately ineffective gauges. This continually tepid news continues to offset the corporate earnings successes, so the question is, what specific news has to come over the wires to get the market winning again?

Of course, any positive report tends to put the market up for the day, however what would trigger and sustain a rally? I believe that unemployment is the most important of the three depressive factors, and that it currently weighs as the largest bear. Not until unemployment falls under 8% do we have a chance to party like it’s October, 2007. There is just too much money on the sidelines and too much depressive mood when unemployment is this high. It appears that it will take sometime for the unemployment rate to get that low, however a surprisingly good number like 9.2 on August 6th would at least display that the United States is slowly but definitively putting people back to work. Options Traders Get Bearish On Moody’s

Time will tell if the European banking stress tests had validity. If for example, Moody’s decides to give a downgrade to the financial health of one or more of the European nations, this will reinforce criticism of the test and re-invoke anxiety surrounding the global system. On the other hand, if negative news lays dormant and investors begin to gain some measure of confidence that the continent will not collapse; this will go a long way in reintroducing some panicked money back into the game.

People will be avoiding foreclosure, buying new homes, and increasing the value of their current home through renovative improvement when they are back to work. Home buying tax credits and record low interest rates have been unable to boost the industry because of high unemployment, however, at least a floor seems to have been established and pockets of increasing real estate value are beginning to appear in a small number of markets. In addition, homeowners have been able to refinance their homes at these record interest rates that have saved many a family from falling into foreclosure as well as bankruptcy, two positive points which strengthens that floor. But, not until reports surface that new homes are being built at generational baseline levels and homes are selling again will the market be in a position to reach its potential.

The fundamentals are in place for a bullish run. Hopefully, the preponderance of excellent corporate earnings translates into increased employment the way this correlation existed in the 1990′s. If the triangular forces of high unemployment, debt, and a poor housing market do not show improvement, it appears that we may hover in the 9000-11,000 range indefinitely. I do not subscribe to the bearish claims of Armageddon. Europe is not going to collapse, unemployment rates and housing appear to have bottomed out as they do now and again show flickers of light, and our domestic banking system is in much better condition than it was in the fall of 2008. Options Traders Get Bearish On Moody’s

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