Louise Bedford is a best-selling author of books on the sharemarket and director of The Trading Game, the No. 1 trading mentor program in the world. Can you tell us about your background in trading? How did you get started? It all started for me around 27 years ago. I went to a seminar about … Continue reading Expert Interview Series: Louise Bedford of The Trading Game on Getting Started as a Trader
Two options traders walk into a bar, both hoping to get a little bit rich, but neither one knows the other. How do they make a deal? No, that's not the setup to a punch line. It's more or less the problem that everyone in the derivatives market faces every single day: How do you … Continue reading What Is a Clearing House?
Let's talk pricing. Options are priced based on their intrinsic and extrinsic value. Intrinsic value comes from comparing the raw strike and stock prices, and extrinsic value accounts for all of the surrounding variables such as volatility and time value of money. A broker crunches these numbers together and comes up with the premium. Traders … Continue reading The Time, Intrinsic, and Extrinsic Value of Money Invested in Options
Stocks are often called the casinos of the investment world. They lack the diversification, controls, and offsetting risks that make vehicles like the mutual fund more stable in the long term. At the same time, stocks offer the potential for explosive growth if the underlying company takes off. Look at some ways to keep your … Continue reading Is It Possible to Improve the Odds in Stock Option Trading?
We live in a brand new world, ladies and gentlemen. Yes, things are different now and everyone can feel it. The Dow Jones Average has officially passed 20,000. For traders who deal in stocks and bonds, this generally means good things. A rising Dow means greater wealth all around, albeit not necessarily unambiguously. (There will … Continue reading How Does a 20,000 Dow Affect Options Trading?
Purchasing a derivative doesn't work entirely the same that a stock does. Since these are contracts based on future transactions, the investor doesn't have to produce up-front capital in the same way he would for a stock exchange. He can't, after all; the transaction hasn't happened yet. However, at the same time, the system needs … Continue reading Premiums vs. margin vs. leverage