Trading Stock Options: A Simple Guide for Beginners

Never put all your eggs in one basket—this is one unwritten rule in the financial market. Diversifying your investments lessens the risk of losing all your money on a certain period due to market fluctuations. Usually, investment portfolios include a variety of securities such as stocks, bonds, properties, and mutual funds. To expand your investment portfolio, consider trading stock options.

What are stock options?

Stock options are agreements between two parties that give the stock option buyer the right to purchase 100 shares of a stock at a fixed price from the stock option seller within a certain period. The holder has the option not to buy a certain asset if its value drops.

There are two types of stock options trading: the call options and the put options. Call options allow the holder to buy an asset at a fixed price on or before a certain date. Call options buyers get more profits if the price of the stock they purchased has increased before its expiration date. Put options allow the holder to sell an asset at a fixed price on or before a certain date. Unlike call buyers, put options buyers benefit more if the value of the stock drops before it expires.

Stock options trading vs. stock trading

Don’t confuse stock options trading with stock trading because these are two entirely different investment methods. When you invest in stocks, you get to own a part of a publicly listed company. In contrast, options always involve a transaction between a buyer and a seller.

Trading stock options offers more benefits than other investment types. One of the best benefits of options trading is the unlimited possibility of profits with limited risk in just a short time. It also gives the holder more flexibility to invest in particular market outcomes. However, options trading can be very risky especially for beginners and for those who are not careful enough with their investment decisions.

If you’re interested in trading options, it’s recommended that you take options trading courses to know more about how to succeed in this type of investment.

Training Yourself to Become a Better Investor? Take Online Classes for Stock Traders

To guarantee success in the stock market, a trader needs resources that can be used to effectively apply trading strategies that translate into high profits and low risks. That is exactly what the educational firm OptionsUniversity has to offer to thousands of traders.

What is OptionsUniversity?

Established in 2004, OptionsUniversity is the top provider of stock options strategies that ensure more profits and safer stock investing. The educational firm helps traders make profits with options consistently with minimal risks.

How does it work?

OptionsUniversity operates with both profit earning and safe investing in mind. To help the company’s students achieved those two things, it combines unmatched expertise with the dedication to give a completely different perception of the options trade.

Learning how to make the most out of stock trading is achieved by taking the Options University Coaching Program, which is made up of two separate trading mentoring programs. The Option Trading Coaching Program and The Day Trading Coaching Program both teach trading strategies through one-on-one coaching, email support, and online workshops. These coaching programs work by changing a trader’s mindset toward investing and financial markets for optimal profits and minimized losses.

In the training you’re kind of learning what it takes to understand what is a stockbroker?

How to use OptionsUniversity

Using the coaching and mentoring programs offered by this educational company is simple and easy. Students are provided with instructional videos and workbooks that contain every essential information and techniques necessary to succeed in options trading. Traders get to learn from stock trading experts the ways of protected and profitable options trades.

In addition, the tutorials and comprehensive explanations assure high-profit yet low-risk money-making opportunities on the financial market.

Why I Recommend Options University

This company has already received recognitions for excellence. In 2008, the OptionsUniversity made it to the Top 500 privately held U.S. companies by Inc. Magazine. Apart from being the 276th placer in the list, the company ranked 11th in the Top 100 Businesses in Florida and second in the Top Education Companies category.

As a stock investor and broker, this online academy is one of the tools I use to enrich my knowledge and learn strategies for buying and selling stocks.

How to Learn As Much As You Can about Stock Trading

Are you a beginner in the stock trading world? If you are clueless about how and where to start, do not fret. Take your time to learn as many things as you can. The stock market is a very unpredictable yet exciting place for investors who want to grow their money in the long term.

Here are the basic things you need to keep in mind throughout your learning journey as a first-time stock investor:

Understand the stock market and learn stock investing strategies

Educate yourself about the strategies for buying and selling stocks and the latest information about stocks and the stock market. Adequate knowledge about the ins and outs of the day trading business spells the difference between success and failure in trading stocks.

Subscribe to an online trading firm.

Among the most comprehensive and reliable sources of information about stock trading are online trading firms. When you sign up for these trading firms, you will be provided with stock reports and day trading information and updates. Some trading sites may even provide updates on after-hours stocks, which may be useful to your stock investments and mutual fund options.

They may also offer real-time stock quotes to give you an idea of the stock fluctuations on the floor.

Online trading firms are not one and the same. Some of them stand out; others may not perform as you expect. Look for an online trading firm that can give you various ways to get firsthand information from the stock market. It would be great if the trading site you choose allows you to open a free account.

A good trading site should make life easier for you—not the other way around, so learn more and more, never stop learning! So choose a trading site that provides easy-to-understand instructions and clearly shows the steps to monitor your investments and to manage your stocks. It should also inform you about the best day trading stock tip updates as well as your other stock options.