Option Trading and Record Keeping

I often think about other people who trade options as much as I do all day. I wonder if they use the best discount brokers that area available and most importantly, how do they keep records of all their trade?

The point of record keeping in the complex profession of option trading in my opinion is just about the most important thing there is. How can you know if you're successful in trading options if you don't know your profits and losses per stock, per trade type, per day, per month for a whole year? For me the answer has always been a combination of 3 methods. The first method of course would be to use a spreadsheet to keep a current total of all stocks I own. I keep another spreadsheet to record all my expenses for every month, and this is vital to know the grand total of all income sources and expenses including trading fees.

The most important tool I use for all my stock and option trading is Microsoft Access. Using the Access database is the perfect tool for recording each stock or option trade. For options I have a column that represents the number of contracts for each option trade and for options one contract represents 100 shares of stock. If I buy and option contract then the contract number would be negative and if I sell then the contract number would be positive. The other columns in the table would be for the price of the option and the trade fee, so to calculate the total for any option trade would be (100*Price*Contract) - Trade fee. Using SQL (Structured Query Language) has allowed me over the years to display very important statistics and reports to let me know how I am doing for any stock or option trade type or strategy and summarizing performance by stock, option, month, day or year has been very easy to accomplish.

The most important point is how can you really know how you are doing if you don't keep records? You might get a stock put to you and then sell it at loss, but then know that overall because of the option premium you received for selling the PUT that actually you made a profit on that trade overall. Without keeping records, you would never know how you really did for any specific complex option trade.

With any profession record keeping is vital to know how you are really doing, but with the difficult profession of option trading, keeping records is just about the most important thing you can do.

Option Trader, Biographer, Screenwriter, Retired IT professional.

By: Djelloul On 5:58 AM

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The New Investor Vs Stock Market 2015-2016

I write this as a "heads up" to the new investor, especially those who intend to start investing money in the stock market in 2015 or 2016. We're all a new investor sometime and all subject to the same misconceptions, illusions and mistakes when we start investing money in the stock market. Here's a simple guide to investing money as the market unfolds in 2015 and 2016.

If you start investing money in the stock market before you have a handle on such things as P-E ratios, dividend yields and past market cycles consider yourself a new investor. Ditto, if you don't feel that you really understand the big picture - even if you have been an investor for several years (like millions of other folks). I write this as a former financial planner who worked with many uninformed (new) investors... because most people who start investing money in the stock market do it uninformed.

Many new investors get excited when the market makes new highs. If you were excited by the new highs in the market in 2014, take a deep breath and push your emotions (like greed) aside before investing money in the stock market in 2015 and beyond. Don't be afraid of "missing out" because stocks are NOT cheap (P-E ratios are not low) while dividend yields ARE low. There are few bargains around. After more than five consecutive good years the "herd instinct" has taken over on Wall Street. If you became a new investor since the financial crisis ended in early 2009, you have probably been misled by what you've seen.

You may now be a member of the herd and overly optimistic about the future. That's what often happens to new investors who start investing money in the stock market at or near a market low. Those who "luck out" with timing their first time out are vulnerable to future market shock. "It's better to be lucky than good" is likely to work for the new investor only once. Don't push your luck in 2015 and beyond.

Market cycles have always been a major part of the game, and few new investors really have a perspective on market trends. The newbie who gets lucky often credits his or her success to stock picking. The simple truth is that it's easy pickings if you start investing money in the stock market when a new uptrend sweeps prices higher. On the other hand, if you start investing money when a major downward trend takes hold, your odds of taking big losses are about 99%.

To succeed over the long term you need to take emotion out of the picture and keep an eye on the horizon in search of EXTREMES. For 2015 and beyond, there are a couple of extremes that could signal a change in trend from up to down. How long can interest rates be stuck at record lows while the stock market rallies to new highs? Lower interest rates have traditionally been the key to stimulating the economy and sending corporate sales, profits and stock prices higher. Presently at near record lows, rates can't go much lower. This might not be a good time to start investing money in the stock market.

Forget about optimism and pessimism. Rising interest rates hurt corporate sales and profits; and lower profits can make P-E ratios skyrocket overnight. In other words, stock PRICES vs. EARNINGS (P-E ratios) can rise quickly when profits fall, making stocks expensive. If you are a new investor beware: now is probably not a good time to start investing money in the stock market. It is a good time to learn.

Today's extremes: extremely low interest rates, and almost six straight years of rising prices without a major change in trend. A significant uptrend in interest rates will make new investors out of all but the old heads (like myself). That's what makes 2015 and 2016 scary. That's why you might want to think twice before you start investing money in the stock market in 2015 and beyond. Learn now. Later, when prices are low and the uninformed herd is selling, is when you want to start investing money in the stock market.

By: Djelloul On 5:55 AM

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Have You the Nerves for Stock Trading?

Stock Trading, can be a great home based business. Many try but most give up quickly as it is not usually an overnight successful business. To succeed you need to devote some time and effort to master the right skills. It is advisable to gain knowledge from experienced traders as this type of home based business is rarely one you can learn yourself.

The top traders are successful because they have learnt to hone in on their skills with dedication and apply good old-fashioned practice. They have learnt what works and what does not.

So how do you start to master this online home business?

• This type of industry requires steady nerves. If you are the type of person who can stay calm when others around you are fearful, then you will do well. Successful traders know that like playing poker it is imperative not to panic when things start going wrong, but to remain in control.

• It is preferable you learn from a reputable broker and has proven to be consistently successful. Check that they offer a trading platform that you can understand, is a lot to master. This is not a business you can hurry results. Many beginner traders get impatient because they want instant results, so will change to another trader platform. This not to be recommended because you will receive conflicting information, get frustrated and worst of all lose money.

• Once you put money into your online trading account, the most important thing to remember is that this money is at risk. So use money that is definitely not required for your daily living expenses, such as bills, groceries etc. Consider your trading money as if it were holiday money. Have the same attitude toward trading. That way you will be able to accept small losses. The ideal is to focus on your trades and accept any small losses you make, then you will be much more successful in the long run.

• Choose a trader program which gives a full money back guarantee and contact email for support so you can get answers quickly.

It really is a case of success breeds success and your confidence will grow. Stock trading can be great way to make money online, as a home based business. You will become a profitable trader only though if you take your time and accept that there will be a steep learning curve.

Wendy Heyworth lives in Tauranga New Zealand
Wendy has had a successful varied business background from sole operator business to directorship in multi-national businesses. She now has her business working from her home.
She inspires and empowers others to seek out opportunities to work from home.

By: Djelloul On 5:46 AM

Continue Reading

The New Investor Vs Stock Market 2015 2016

I write this as a "heads up" to the new investor, especially those who intend to start investing money in the stock market in 2015 or 2016. We're all a new investor sometime and all subject to the same misconceptions, illusions and mistakes when we start investing money in the stock market. Here's a simple guide to investing money as the market unfolds in 2015 and 2016.

If you start investing money in the stock market before you have a handle on such things as P-E ratios, dividend yields and past market cycles consider yourself a new investor. Ditto, if you don't feel that you really understand the big picture - even if you have been an investor for several years (like millions of other folks). I write this as a former financial planner who worked with many uninformed (new) investors... because most people who start investing money in the stock market do it uninformed.

Many new investors get excited when the market makes new highs. If you were excited by the new highs in the market in 2014, take a deep breath and push your emotions (like greed) aside before investing money in the stock market in 2015 and beyond. Don't be afraid of "missing out" because stocks are NOT cheap (P-E ratios are not low) while dividend yields ARE low. There are few bargains around. After more than five consecutive good years the "herd instinct" has taken over on Wall Street. If you became a new investor since the financial crisis ended in early 2009, you have probably been misled by what you've seen.

You may now be a member of the herd and overly optimistic about the future. That's what often happens to new investors who start investing money in the stock market at or near a market low. Those who "luck out" with timing their first time out are vulnerable to future market shock. "It's better to be lucky than good" is likely to work for the new investor only once. Don't push your luck in 2015 and beyond.

Market cycles have always been a major part of the game, and few new investors really have a perspective on market trends. The newbie who gets lucky often credits his or her success to stock picking. The simple truth is that it's easy pickings if you start investing money in the stock market when a new uptrend sweeps prices higher. On the other hand, if you start investing money when a major downward trend takes hold, your odds of taking big losses are about 99%.

To succeed over the long term you need to take emotion out of the picture and keep an eye on the horizon in search of EXTREMES. For 2015 and beyond, there are a couple of extremes that could signal a change in trend from up to down. How long can interest rates be stuck at record lows while the stock market rallies to new highs? Lower interest rates have traditionally been the key to stimulating the economy and sending corporate sales, profits and stock prices higher. Presently at near record lows, rates can't go much lower. This might not be a good time to start investing money in the stock market.

Forget about optimism and pessimism. Rising interest rates hurt corporate sales and profits; and lower profits can make P-E ratios skyrocket overnight. In other words, stock PRICES vs. EARNINGS (P-E ratios) can rise quickly when profits fall, making stocks expensive. If you are a new investor beware: now is probably not a good time to start investing money in the stock market. It is a good time to learn.

Today's extremes: extremely low interest rates, and almost six straight years of rising prices without a major change in trend. A significant uptrend in interest rates will make new investors out of all but the old heads (like myself). That's what makes 2015 and 2016 scary. That's why you might want to think twice before you start investing money in the stock market in 2015 and beyond. Learn now. Later, when prices are low and the uninformed herd is selling, is when you want to start investing money in the stock market.

By: Djelloul On 3:29 AM

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Simple Tips for Making a Killing in the Stock Market

Trading on the stock market is a great way to achieve financial independence but the road is littered with obstacles and hurdles that will most certainly see you lose your investments. Yes you can make money on the stock market but without the right advice as I say will make you a stock market loser no doubt. We don't want you to be a loser, so here are some simple tips to becoming a winner.

First of all, it's best to employ a broker to handle all your trades. A broker can execute all your trades for you, and nowadays you can find a broker online. Some people still prefer to have a broker via telephone and that's fine. The problem with online trading is that it can be too easy to make a bad trading decision. Worth mentioning it is best that you never take stock tips from a broker. You are the trader and your decisions are your own and not the brokers.

Although you can employ a broker to do all your analytical work for you, that is perform some technical analysis, I find it is best to use charting software. Such programs have databases that can analyse historical data at the click of a mouse and it will save you countless hours of having to trawl through newspapers every day to find the information you need. I won't recommend and particular software here although the one I use is called Sharescope. With it I can filter new market highs and lows as well as draw trend lines.

It's all good having the right software on your computer and sound fundamental and technical analysis but without an exit strategy you are sure to close trades just before they become profitable. Far too often the trader will base the closing of his trades on pure emotion. It's emotion that causes the market changes but when it comes to making an exit, you must have a strategy set in stone before you make the trade. This way you can cancel out any bad decisions based on your emotions. And even stories on the news can see you make bad decisions and therefore losing trades.

Trading isn't easy, and the road to success with it can be long and sometimes you can feel like you are going to lose your entire investment because of one or two losing trades. Stay strong, stay focussed on the long term and you will eventually find your way in the world of stock market investing.

By: Djelloul On 3:22 AM

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Have You the Nerves for Stock Trading ?

tock Trading, can be a great home based business. Many try but most give up quickly as it is not usually an overnight successful business. To succeed you need to devote some time and effort to master the right skills. It is advisable to gain knowledge from experienced traders as this type of home based business is rarely one you can learn yourself.

The top traders are successful because they have learnt to hone in on their skills with dedication and apply good old-fashioned practice. They have learnt what works and what does not.

So how do you start to master this online home business?

• This type of industry requires steady nerves. If you are the type of person who can stay calm when others around you are fearful, then you will do well. Successful traders know that like playing poker it is imperative not to panic when things start going wrong, but to remain in control.

• It is preferable you learn from a reputable broker and has proven to be consistently successful. Check that they offer a trading platform that you can understand, is a lot to master. This is not a business you can hurry results. Many beginner traders get impatient because they want instant results, so will change to another trader platform. This not to be recommended because you will receive conflicting information, get frustrated and worst of all lose money.

• Once you put money into your online trading account, the most important thing to remember is that this money is at risk. So use money that is definitely not required for your daily living expenses, such as bills, groceries etc. Consider your trading money as if it were holiday money. Have the same attitude toward trading. That way you will be able to accept small losses. The ideal is to focus on your trades and accept any small losses you make, then you will be much more successful in the long run.

• Choose a trader program which gives a full money back guarantee and contact email for support so you can get answers quickly.

It really is a case of success breeds success and your confidence will grow. Stock trading can be great way to make money online, as a home based business. You will become a profitable trader only though if you take your time and accept that there will be a steep learning curve.

Wendy Heyworth lives in Tauranga New Zealand
Wendy has had a successful varied business background from sole operator business to directorship in multi-national businesses. She now has her business working from her home.
She inspires and empowers others to seek out opportunities to work from home.

By: Djelloul On 3:18 AM

Continue Reading