Wednesday, July 26, 2006

When to go for stock options trading vs stock investing

Stock options are one of the most crucial instruments for stock traders in uncertain times. These are the instrument of the derivative segment of the overall stock trading business.

Every expert stock trader must be aware of pros and cons of trading in stocks in full vs trading with stock options and specific point of time. The opportunity of making money and profits is never dead in the stock market. It's the right decision at the right time that pays all profits to the stock trader.

In case of options trading, a call option from your side gives another investor an assurance to buy a specific stock from you at a value that is set by you anytime before a certain date. It's a promise from your side that you'll make that stock available to the market before any specific date. You collect a profit by selling the call and you earn the profit on the day you sell the option you hold.

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