Buy Put Options Tips -- Increase Your Profits When a Stock Price Falls by Halbert Greene
Stock prices never go down (or up) in a straight line. Wait for a upward spike in the price before you buy, so you get a cheaper price.
Don't take the opinions of analysts too seriously. A few years ago, 70% of analysts rated Dillard's Department Stores (DDS) a Sell or Strong Sell. What an obvious loser, right? Eight months later, it was up 50%. A year later, it was up $100. You'd have lost your shirt by siding with the know-it-all analysts.
Magazine covers are a strong contrarian indicator. When a company or CEO is featured favorably on the cover of a business magazine such as BUSINESS WEEK or FORBES, they often run into trouble a short time later.
Buy put options at least three months before expiration -- longer is even better. Wall Street graveyards are filled with the bodies of investors who were right -- too soon. Besides, the value of put options wastes away a lot more slowly the farther away it is from the expiration month.
The market price may fall to your strike price in the next month -- or nine months from now. But you'll pay a lot less for nine months than for one.
Sure, options that are only 30 days away from expiration are cheap . . . because everybody knows they're about to run out.
If you're convinced a company's stock price is bound to fall, give yourself time to be right.
Don't buy far out of the money put options. Yes, they're so very cheap. That's because, although stocks are volatile, they don't usually drop by $20 per share in one day. It's possible, and someday some stock will, but the odds are slim you'll be holding put options on it when it does.
If you want to gamble, spend that $25 on lotto tickets. The odds against you winning the jackpot are only slightly larger, and you'll probably at least win $3 or $5, giving you SOME return.
If you're not sure whether a stock will go up or down, but it is quite volatile (such as Google) with frequent ups and downs, put options are a better buy for your money. Because most people prefer to think that a stock they like will go up in value, there is more demand for calls than for puts. Less demand for puts makes them relatively cheaper and therefore more profitable than calls.
There are many professional "tricks of the trade" you need. Learn all the buy put stock options tips that you can.
About the Author
Learn how to turn $200 into $4630 profit in 30 days!
Click here -- How to Buy Puts that Make You Money -- learn professional options secrets for a high 6-figure income
AFFILIATE LINK - Sign up for free daily investment letter with news and investment tips
Stock prices never go down (or up) in a straight line. Wait for a upward spike in the price before you buy, so you get a cheaper price.
Don't take the opinions of analysts too seriously. A few years ago, 70% of analysts rated Dillard's Department Stores (DDS) a Sell or Strong Sell. What an obvious loser, right? Eight months later, it was up 50%. A year later, it was up $100. You'd have lost your shirt by siding with the know-it-all analysts.
Magazine covers are a strong contrarian indicator. When a company or CEO is featured favorably on the cover of a business magazine such as BUSINESS WEEK or FORBES, they often run into trouble a short time later.
Buy put options at least three months before expiration -- longer is even better. Wall Street graveyards are filled with the bodies of investors who were right -- too soon. Besides, the value of put options wastes away a lot more slowly the farther away it is from the expiration month.
The market price may fall to your strike price in the next month -- or nine months from now. But you'll pay a lot less for nine months than for one.
Sure, options that are only 30 days away from expiration are cheap . . . because everybody knows they're about to run out.
If you're convinced a company's stock price is bound to fall, give yourself time to be right.
Don't buy far out of the money put options. Yes, they're so very cheap. That's because, although stocks are volatile, they don't usually drop by $20 per share in one day. It's possible, and someday some stock will, but the odds are slim you'll be holding put options on it when it does.
If you want to gamble, spend that $25 on lotto tickets. The odds against you winning the jackpot are only slightly larger, and you'll probably at least win $3 or $5, giving you SOME return.
If you're not sure whether a stock will go up or down, but it is quite volatile (such as Google) with frequent ups and downs, put options are a better buy for your money. Because most people prefer to think that a stock they like will go up in value, there is more demand for calls than for puts. Less demand for puts makes them relatively cheaper and therefore more profitable than calls.
There are many professional "tricks of the trade" you need. Learn all the buy put stock options tips that you can.
About the Author
Learn how to turn $200 into $4630 profit in 30 days!
Click here -- How to Buy Puts that Make You Money -- learn professional options secrets for a high 6-figure income
AFFILIATE LINK - Sign up for free daily investment letter with news and investment tips
