Saturday, December 16, 2006

Dude, You Need to Buy Some Dell Shares

With such a rudimentary phrase famed by the famous commercials of years past, Dell has been one of the most prominent kings of computer production. However, while this large cap stock has remained relatively stable during the last five years, 2006 proved to be an onus to Dell shareholders with continued amounting capital losses as the stock neared a five year low. However, if you look pass such negativity and focus on trends and technical analysis, you will convincingly find Dell as a bargain for a price under 25 dollars.

Typically during the fourth quarter of seasons end, Dell prices have followed an upward trend towards large capital gains. Such achievement is usually attributed to strong fundamentals which spawn from the sales from the company's popularized notebook and desktop computers along with accessories during the back-to-school months of August through October. With such a seasonal increase in revenue and profit, transcending to earnings, the outlook for Dell shares characteristically remain strong through the fall and winter months. The last five years have proven to provide such evidence as shown through technical assistance. Last year during this time period, the stock increased nearly 10%, the year prior to that: 20%, during 4th quarter 2003: 5%, 4th quarter 2002: 15%, and during the 4th quarter of 2001, when the price of Dell was at a number similar to this year, the price went up nearly 100% for the duration of that period. One of the key fundamentals in making profits with equities is to follow trends, and Dell provides a positive inclination which will inevitably yield high capital gains.

While an argument can be made that the economy is showing some indication of a slowdown which is not favorable for technology stocks, during 2001 and 2002 when similar accusations were held, the price of the stock did not adversely heed such information and garnered gains at a rapid pace. With a price near the 20.00-25.00 range, and with the prospect of an exciting fourth quarter ahead, I look for Dell to prove many critics wrong when smart investors are racking up a cornucopia of profits around January.

With such a rudimentary phrase famed by the famous commercials of years past, Dell has been one of the most prominent kings of computer production. However, while this large cap stock has remained relatively stable during the last five years, 2006 proved to be an onus to Dell shareholders with continued amounting capital losses as the stock neared a five year low. However, if you look pass such negativity and focus on trends and technical analysis, you will convincingly find Dell as a bargain for a price under 25 dollars.

Typically during the fourth quarter of seasons end, Dell prices have followed an upward trend towards large capital gains. Such achievement is usually attributed to strong fundamentals which spawn from the sales from the company's popularized notebook and desktop computers along with accessories during the back-to-school months of August through October. With such a seasonal increase in revenue and profit, transcending to earnings, the outlook for Dell shares characteristically remain strong through the fall and winter months. The last five years have proven to provide such evidence as shown through technical assistance. Last year during this time period, the stock increased nearly 10%, the year prior to that: 20%, during 4th quarter 2003: 5%, 4th quarter 2002: 15%, and during the 4th quarter of 2001, when the price of Dell was at a number similar to this year, the price went up nearly 100% for the duration of that period. One of the key fundamentals in making profits with equities is to follow trends, and Dell provides a positive inclination which will inevitably yield high capital gains.

While an argument can be made that the economy is showing some indication of a slowdown which is not favorable for technology stocks, during 2001 and 2002 when similar accusations were held, the price of the stock did not adversely heed such information and garnered gains at a rapid pace. With a price near the 20.00-25.00 range, and with the prospect of an exciting fourth quarter ahead, I look for Dell to prove many critics wrong when smart investors are racking up a cornucopia of profits around January.

Earnings Season: To Hold Or Not To Hold, That Is The Question

Holding a stock (day or swing) trade into earnings can very often lead to some fairly large profits. However, it can also lead to some very large disasters…so large that it just may be the last trade you ever make.

When I was still an active day trader and now as moderator of Daytraders.com, I have witnessed both sides of this phenomenon from each perspective. I have lost big and was lucky enough to catch a few winners. Yet, after years of experience, observation and unscientific analysis of this practice, it is my opinion that I was just that…lucky.

First of all, holding overnight or even a few hours during the day waiting for an earnings report has removed you from a pure day trader status to a swing trader. There are merits of both methods of trading, which is fodder for a future article. Moreover, I will mention, that as common sense would suggest, that the longer you hold a stock as a trader, the more apt it is to move against you.

Most people, including most analysts, don’t really knows what is going to happen until the company releases their earnings. Sure, there are a lot of folks that will profess to be a genius at predicting such things, but I haven’t seen it. In fact, I have yet to see anyone really much more accurate, if any, than that famous sitcom parrot that used to pick stocks using the Wall Street Journal lining the bottom of his birdcage. Yes, I said parrot, as in, “Polly wants a cracker!’
Holding a stock (day or swing) trade into earnings can very often lead to some fairly large profits. However, it can also lead to some very large disasters…so large that it just may be the last trade you ever make.

When I was still an active day trader and now as moderator of Daytraders.com, I have witnessed both sides of this phenomenon from each perspective. I have lost big and was lucky enough to catch a few winners. Yet, after years of experience, observation and unscientific analysis of this practice, it is my opinion that I was just that…lucky.

First of all, holding overnight or even a few hours during the day waiting for an earnings report has removed you from a pure day trader status to a swing trader. There are merits of both methods of trading, which is fodder for a future article. Moreover, I will mention, that as common sense would suggest, that the longer you hold a stock as a trader, the more apt it is to move against you.

Most people, including most analysts, don’t really knows what is going to happen until the company releases their earnings. Sure, there are a lot of folks that will profess to be a genius at predicting such things, but I haven’t seen it. In fact, I have yet to see anyone really much more accurate, if any, than that famous sitcom parrot that used to pick stocks using the Wall Street Journal lining the bottom of his birdcage. Yes, I said parrot, as in, “Polly wants a cracker!’

Friday, December 15, 2006

The Quest to Buy Qwest

You may have noticed the recent increase in the price of Qwest during the past 12 months. In fact, during such a volatile time period, the stock has increased near a percentage of 110%. Such activity is uncommon during such a short duration especially as telecommunication company in a sector plagued by oversold equities. Coming off surprising lows of near one dollar almost four years ago, you might be hesitant to join the bandwagon, but also note that a little bit before reaching such a low, Qwest reached a high of 30.00: a mark I believe it will attain again.

Based with strong fundamentals, Qwest is hard to use technical analysis due to its unusual steady increase over the duration of one year. Typically I base a lot of my predictions off resistance and support levels or the head and shoulders concept, but interesting enough, this company does not experience such volatility and grows at a rate you would expect for durations of five to ten years. However, with strong cash flow (especially in the recent report of operating margins) and good guidance which should prop up earnings, Qwest still remains a strong buy. Some investors may argue that since the company has surpassed its recent 52 week high, the stock may be in for a sell off. Well characteristically I would agree with such a sentiment, but the same idea was said when Qwest was around 7.00 and again at 6.00 and 5.00. What happened during those periods? The price did not hit a resistance level and continued to growth at a fairly rapid rate. At a number around 8.50, I will not be a partisan to such a conviction again and proclaim that Qwest has the potential to reach its previous five year highs again.
You may have noticed the recent increase in the price of Qwest during the past 12 months. In fact, during such a volatile time period, the stock has increased near a percentage of 110%. Such activity is uncommon during such a short duration especially as telecommunication company in a sector plagued by oversold equities. Coming off surprising lows of near one dollar almost four years ago, you might be hesitant to join the bandwagon, but also note that a little bit before reaching such a low, Qwest reached a high of 30.00: a mark I believe it will attain again.

Based with strong fundamentals, Qwest is hard to use technical analysis due to its unusual steady increase over the duration of one year. Typically I base a lot of my predictions off resistance and support levels or the head and shoulders concept, but interesting enough, this company does not experience such volatility and grows at a rate you would expect for durations of five to ten years. However, with strong cash flow (especially in the recent report of operating margins) and good guidance which should prop up earnings, Qwest still remains a strong buy. Some investors may argue that since the company has surpassed its recent 52 week high, the stock may be in for a sell off. Well characteristically I would agree with such a sentiment, but the same idea was said when Qwest was around 7.00 and again at 6.00 and 5.00. What happened during those periods? The price did not hit a resistance level and continued to growth at a fairly rapid rate. At a number around 8.50, I will not be a partisan to such a conviction again and proclaim that Qwest has the potential to reach its previous five year highs again.

The Quest to Buy Qwest

You may have noticed the recent increase in the price of Qwest during the past 12 months. In fact, during such a volatile time period, the stock has increased near a percentage of 110%. Such activity is uncommon during such a short duration especially as telecommunication company in a sector plagued by oversold equities. Coming off surprising lows of near one dollar almost four years ago, you might be hesitant to join the bandwagon, but also note that a little bit before reaching such a low, Qwest reached a high of 30.00: a mark I believe it will attain again.

Based with strong fundamentals, Qwest is hard to use technical analysis due to its unusual steady increase over the duration of one year. Typically I base a lot of my predictions off resistance and support levels or the head and shoulders concept, but interesting enough, this company does not experience such volatility and grows at a rate you would expect for durations of five to ten years. However, with strong cash flow (especially in the recent report of operating margins) and good guidance which should prop up earnings, Qwest still remains a strong buy. Some investors may argue that since the company has surpassed its recent 52 week high, the stock may be in for a sell off. Well characteristically I would agree with such a sentiment, but the same idea was said when Qwest was around 7.00 and again at 6.00 and 5.00. What happened during those periods? The price did not hit a resistance level and continued to growth at a fairly rapid rate. At a number around 8.50, I will not be a partisan to such a conviction again and proclaim that Qwest has the potential to reach its previous five year highs again.

You may have noticed the recent increase in the price of Qwest during the past 12 months. In fact, during such a volatile time period, the stock has increased near a percentage of 110%. Such activity is uncommon during such a short duration especially as telecommunication company in a sector plagued by oversold equities. Coming off surprising lows of near one dollar almost four years ago, you might be hesitant to join the bandwagon, but also note that a little bit before reaching such a low, Qwest reached a high of 30.00: a mark I believe it will attain again.

Based with strong fundamentals, Qwest is hard to use technical analysis due to its unusual steady increase over the duration of one year. Typically I base a lot of my predictions off resistance and support levels or the head and shoulders concept, but interesting enough, this company does not experience such volatility and grows at a rate you would expect for durations of five to ten years. However, with strong cash flow (especially in the recent report of operating margins) and good guidance which should prop up earnings, Qwest still remains a strong buy. Some investors may argue that since the company has surpassed its recent 52 week high, the stock may be in for a sell off. Well characteristically I would agree with such a sentiment, but the same idea was said when Qwest was around 7.00 and again at 6.00 and 5.00. What happened during those periods? The price did not hit a resistance level and continued to growth at a fairly rapid rate. At a number around 8.50, I will not be a partisan to such a conviction again and proclaim that Qwest has the potential to reach its previous five year highs again.

Are You Looking to Buy Stocks?

Investing for the future is important if you ever plan to retire. One form of investment is buying stocks in corporations. Stocks represent a portion of a company, so when you buy stocks, you are essentially buying into the company. You can benefit from any profits it makes, but you can also lose money if the company’s performance, or the market as a whole, goes down.

When you look at investing in stocks, you may want to consult a financial advisor who works with stocks and mutual funds for a living. He or she will have knowledge of which stocks you should buy and which ones you should avoid. If you wish to choose the companies you will invest in, look for companies that are growing and offer some stability. Also, if sales in, say, electronics are very high, you may want to invest in a company that manufactures electronics. Take some time to research the stock market before you make your investment decisions.

Once you have decided on some stocks you would like to purchase, you’ll need to pay attention to what the market is doing. In order to benefit the most from your investments, you’ll need to time when you buy, and when you sell, your stocks. If you choose some stable companies and buy stocks in them while prices are low, because of the market or because of a period of time where the company is not bringing in large profits, it is most likely that your stocks will increase in value.

When you are looking to sell your stocks, it is good to set a price for yourself and decide that when your stocks reach that price, you will sell them. Often, people hang on to their stocks, wanting to get the most out of them that they can, and then the market drops and they lose money.

You can see that there is frequent decision making in the process of buying and selling stocks. If you are willing to put some time and effort into your investments, you will be pleased to see how much you will profit from your stocks.

Investing for the future is important if you ever plan to retire. One form of investment is buying stocks in corporations. Stocks represent a portion of a company, so when you buy stocks, you are essentially buying into the company. You can benefit from any profits it makes, but you can also lose money if the company’s performance, or the market as a whole, goes down.

When you look at investing in stocks, you may want to consult a financial advisor who works with stocks and mutual funds for a living. He or she will have knowledge of which stocks you should buy and which ones you should avoid. If you wish to choose the companies you will invest in, look for companies that are growing and offer some stability. Also, if sales in, say, electronics are very high, you may want to invest in a company that manufactures electronics. Take some time to research the stock market before you make your investment decisions.

Once you have decided on some stocks you would like to purchase, you’ll need to pay attention to what the market is doing. In order to benefit the most from your investments, you’ll need to time when you buy, and when you sell, your stocks. If you choose some stable companies and buy stocks in them while prices are low, because of the market or because of a period of time where the company is not bringing in large profits, it is most likely that your stocks will increase in value.

When you are looking to sell your stocks, it is good to set a price for yourself and decide that when your stocks reach that price, you will sell them. Often, people hang on to their stocks, wanting to get the most out of them that they can, and then the market drops and they lose money.

You can see that there is frequent decision making in the process of buying and selling stocks. If you are willing to put some time and effort into your investments, you will be pleased to see how much you will profit from your stocks.

Thursday, December 14, 2006

Sticking With Your Trading Plan

We've all seen it on TV in some fashion. A couple of people invest hard earned money into a stock that is guaranteed to go through the roof in just a couple of days based on a "friends" word. So they buy in and excitedly watch the value of their investment rise and rise, just when they think about cashing in, their "friend" tells them to hold out. They wait and watch as their money basically goes down the drain. It's a classic comedy situation...until it happens to you.

Not too many people are in the habit of just throwing money away, but entering the stock market without a strong trading plan is basically the same thing. The stock market can be unforgiving, especially for the inexperience investor.

Despite that fact into account it is still not unheard of to hear people buying into stocks purely based on biased speculation or Internet rumors. A sound trading plan can make sure that doesn't happen to you. Remember from part two of this series, that a trading plan serves as a financial road map. So why if you already have your route planned would you take a shortcut in the form of risky trades based on unverified information?

Sticking with a trading plan ensures that you avoid the pit falls of risky investing. Due to the inexperience of many and a lack of strict regulation in some areas of trade, some companies have been able to dupe investors out of millions of dollars. These companies make promises of big profits and incredibly low risk. Knowing that you are going to meet your financial goals, you are able to see these schemes for what they are.

Due to the volatile nature of the stock market though, there are times when even the soundest trading plan can take losses. A diverse trading portfolio will help to lessen those losses ensuring you can weather some of the normal storms. Having a sound trading plan, can help an investor stick with it.

In most cases sticking with a company after a slight loss can often prove to be a good decision. A solid trading plan though includes a sound exit strategy. Sometimes you just have to know when to cut your losses.

There are some losses that are just too much for a portfolio, careful planning is needed to be able to identify if that happens. By sticking with a plan you can ensure that any trade choices that are made are going to be made with a clear head because you were prepared.

Investing doesn't have to be overly complicated, but it does require planning. A little extra research will go along way toward ensuring that no matter what the market is doing, you are prepared to meet your financial goals.

Diverse investing is about long-term growth. Sure it would be great to hit it big someday, but the facts don't lie. Inexperienced and nonprofessional investors run a very high risk of losing money. Stick with a trading plan and you may just find yourself at Point B of your financial road map

We've all seen it on TV in some fashion. A couple of people invest hard earned money into a stock that is guaranteed to go through the roof in just a couple of days based on a "friends" word. So they buy in and excitedly watch the value of their investment rise and rise, just when they think about cashing in, their "friend" tells them to hold out. They wait and watch as their money basically goes down the drain. It's a classic comedy situation...until it happens to you.

Not too many people are in the habit of just throwing money away, but entering the stock market without a strong trading plan is basically the same thing. The stock market can be unforgiving, especially for the inexperience investor.

Despite that fact into account it is still not unheard of to hear people buying into stocks purely based on biased speculation or Internet rumors. A sound trading plan can make sure that doesn't happen to you. Remember from part two of this series, that a trading plan serves as a financial road map. So why if you already have your route planned would you take a shortcut in the form of risky trades based on unverified information?

Sticking with a trading plan ensures that you avoid the pit falls of risky investing. Due to the inexperience of many and a lack of strict regulation in some areas of trade, some companies have been able to dupe investors out of millions of dollars. These companies make promises of big profits and incredibly low risk. Knowing that you are going to meet your financial goals, you are able to see these schemes for what they are.

Due to the volatile nature of the stock market though, there are times when even the soundest trading plan can take losses. A diverse trading portfolio will help to lessen those losses ensuring you can weather some of the normal storms. Having a sound trading plan, can help an investor stick with it.

In most cases sticking with a company after a slight loss can often prove to be a good decision. A solid trading plan though includes a sound exit strategy. Sometimes you just have to know when to cut your losses.

There are some losses that are just too much for a portfolio, careful planning is needed to be able to identify if that happens. By sticking with a plan you can ensure that any trade choices that are made are going to be made with a clear head because you were prepared.

Investing doesn't have to be overly complicated, but it does require planning. A little extra research will go along way toward ensuring that no matter what the market is doing, you are prepared to meet your financial goals.

Diverse investing is about long-term growth. Sure it would be great to hit it big someday, but the facts don't lie. Inexperienced and nonprofessional investors run a very high risk of losing money. Stick with a trading plan and you may just find yourself at Point B of your financial road map

Pros and Cons Of Investing In Penny Stocks

Typically when you think of trading stocks, the major stock exchanges may come to mind like the New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotations (NASDAQ), and the American Stock Exchange (AMEX). A Penny stock is a low priced security for a very small company with a market capitalization of under $500 million and usually trade in very low volumes. Penny stocks also trade on other "other the counter" exchanges like the OTCBB and Pink Sheets.

Due to the low trading volumes, penny stocks are an investment option that comes with a sizeable amount of risk. According the Securities and Exchange Commission, potential investors in penny stocks should be aware of the fact that due to the low trading volume of these stocks, it is possible that an investor won't find a buyer for their shares. Finding accurate price quotations are also difficult making it a strong possibility that an investor can lose their entire investment.

Penny stocks do carry a certain appeal for many different kinds of investors. Chances are though, a new investor looking for a potentially lucrative investments with a fairly low entry price will run across the penny stock. The allure comes in the fact that at such low prices any changes are often measurable in hundreds of percent in a given day or two. An investor’s stock value can literally become worth double or even triple the original investment amount.

Conversely, the price of a penny stock can drop in value just as quickly. New and inexperienced investors would do well to avoid making penny stocks a major part of their investment portfolio. Also due to the low listing requirements on exchanges like OCTBB and Pink Sheets, many companies are not to be considered safe investments. Many of the companies listed on alternative exchanges lack enough financial history to be able to accurately determine if they would make a good investment or not. In some cases, companies that are considered to be penny stocks are either new companies or are in some cases dangerously close to bankruptcy.

Unfortunately, some traders have even taken to artificially manipulating stock prices by buying up large amounts of a stock and then convincing individual investors of the need to buy. Since most of these stocks aren't in such great demand, an investor will have to lower his asking price in order to entice a bidder, oftentimes at a loss.

Not every company that trades for "pennies" should be considered fraudulent. Some are simply small companies trying to grow their business and are working very hard to end up on the larger market exchanges. Wading through the fraudulent companies to find the truly reputable companies capable of helping an investor turn a large profit may not be worth it. Investors with low investment income may be convinced that just one good trade can triple their investment, but in the end an investor is better off choosing an investment from a company that they have researched and are convinced that this company's value will grow in the future.

Typically when you think of trading stocks, the major stock exchanges may come to mind like the New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotations (NASDAQ), and the American Stock Exchange (AMEX). A Penny stock is a low priced security for a very small company with a market capitalization of under $500 million and usually trade in very low volumes. Penny stocks also trade on other "other the counter" exchanges like the OTCBB and Pink Sheets.

Due to the low trading volumes, penny stocks are an investment option that comes with a sizeable amount of risk. According the Securities and Exchange Commission, potential investors in penny stocks should be aware of the fact that due to the low trading volume of these stocks, it is possible that an investor won't find a buyer for their shares. Finding accurate price quotations are also difficult making it a strong possibility that an investor can lose their entire investment.

Penny stocks do carry a certain appeal for many different kinds of investors. Chances are though, a new investor looking for a potentially lucrative investments with a fairly low entry price will run across the penny stock. The allure comes in the fact that at such low prices any changes are often measurable in hundreds of percent in a given day or two. An investor’s stock value can literally become worth double or even triple the original investment amount.

Conversely, the price of a penny stock can drop in value just as quickly. New and inexperienced investors would do well to avoid making penny stocks a major part of their investment portfolio. Also due to the low listing requirements on exchanges like OCTBB and Pink Sheets, many companies are not to be considered safe investments. Many of the companies listed on alternative exchanges lack enough financial history to be able to accurately determine if they would make a good investment or not. In some cases, companies that are considered to be penny stocks are either new companies or are in some cases dangerously close to bankruptcy.

Unfortunately, some traders have even taken to artificially manipulating stock prices by buying up large amounts of a stock and then convincing individual investors of the need to buy. Since most of these stocks aren't in such great demand, an investor will have to lower his asking price in order to entice a bidder, oftentimes at a loss.

Not every company that trades for "pennies" should be considered fraudulent. Some are simply small companies trying to grow their business and are working very hard to end up on the larger market exchanges. Wading through the fraudulent companies to find the truly reputable companies capable of helping an investor turn a large profit may not be worth it. Investors with low investment income may be convinced that just one good trade can triple their investment, but in the end an investor is better off choosing an investment from a company that they have researched and are convinced that this company's value will grow in the future.

Wednesday, December 13, 2006

Options Trading Made Easy - Learn How To Profit

If you're trading stocks or bonds, there are a whole range of strategies you can follow, which range from the long term buy and hold, right through to day trading using technical analysis. Options trading is very similar.

Understanding exactly what an option is one of the trickiest things to understand when you're starting out. Basically, an option is a contract that gives you the right to buy (a call option) or sell (a put option) a stock or bond at a set price (the strike price) on or prior to a set date (the expiration date). You might need to read that a few times to get the hang of it!

There are different types of options available in the marketplace, with 'American' options able to be exercised anytime between purchase and expiration, and 'European' options only able to be exercised on the expiry date. Although the terms are geographical, nowadays the location where you buy options doesn't automatically mean you've bought one type or the other. As a general rule of them, American-style options are mostly used for stocks and bonds, whereas European-style options are for indexes.

Officially, options expire on the Saturday after the third Friday of the expiry month of the contract. However as US markets are shut on Saturdays, that makes the Friday the effective expiry day. Talk about confusing!

Now that you have a basic understanding of what an option is and how it works, let's take a look at some basic strategies. I'll just focus on American-style options for stocks.

When you buy or sell an option, you basically have two choices - you can hold it to maturity, or you can choose to exercise it prior to expiry. A large proportion of investors do hold their options until maturity before exercising it to trade the underlying asset. Let's look at an example.

You've purchased a call option for $1, with a strike price of $25. As options contracts are generally for 100 share lots, your purchase (ignoring commissions) would cost you $100, and you'd have the right to purchase $2500 of stock through the option. Now, if the expiry date arrives and the stock is worth $27, it makes sense to go ahead of buy the stock, because you only have to pay $25. That means you've made an immediate profit of $2 per share if you sell them again immediately on the stock market. However you still have to factor in what you paid to buy the option, which was $1 a share. So after your purchase costs are deducted, your overall profit is $1 a share. Well done!
If you're trading stocks or bonds, there are a whole range of strategies you can follow, which range from the long term buy and hold, right through to day trading using technical analysis. Options trading is very similar.

Understanding exactly what an option is one of the trickiest things to understand when you're starting out. Basically, an option is a contract that gives you the right to buy (a call option) or sell (a put option) a stock or bond at a set price (the strike price) on or prior to a set date (the expiration date). You might need to read that a few times to get the hang of it!

There are different types of options available in the marketplace, with 'American' options able to be exercised anytime between purchase and expiration, and 'European' options only able to be exercised on the expiry date. Although the terms are geographical, nowadays the location where you buy options doesn't automatically mean you've bought one type or the other. As a general rule of them, American-style options are mostly used for stocks and bonds, whereas European-style options are for indexes.

Officially, options expire on the Saturday after the third Friday of the expiry month of the contract. However as US markets are shut on Saturdays, that makes the Friday the effective expiry day. Talk about confusing!

Now that you have a basic understanding of what an option is and how it works, let's take a look at some basic strategies. I'll just focus on American-style options for stocks.

When you buy or sell an option, you basically have two choices - you can hold it to maturity, or you can choose to exercise it prior to expiry. A large proportion of investors do hold their options until maturity before exercising it to trade the underlying asset. Let's look at an example.

You've purchased a call option for $1, with a strike price of $25. As options contracts are generally for 100 share lots, your purchase (ignoring commissions) would cost you $100, and you'd have the right to purchase $2500 of stock through the option. Now, if the expiry date arrives and the stock is worth $27, it makes sense to go ahead of buy the stock, because you only have to pay $25. That means you've made an immediate profit of $2 per share if you sell them again immediately on the stock market. However you still have to factor in what you paid to buy the option, which was $1 a share. So after your purchase costs are deducted, your overall profit is $1 a share. Well done!

Why Choose Online Stock Trading

A century ago, the stock market was beginning to take shape. It was very different from what we know today as online stock trading. As time moved on, stock trading developed more and more and turned out to be a great way to make money. By giving the investors a variety of choices such as online stock trading, breakout systems, futures trading, hedging, speculation, swing stock trading, the market has become an indisputable opportunity to make a huge profit.

It is crucial to have a realistic plan and not jump ahead before understanding the basics of stock trading. Besides, taking a small amount of time in perusing the rules of online stock trading will surely be rewarding later. Specialists’ advices recommend trusting yourself, choosing wisely, taking responsibility for your actions and staying focused. Do not lose yourself in the vast sea of traders, separate your techniques from the rest and trade cautiously. You also have to understand that sometimes, in order to make money, you have to first lose some and learn from your mistakes. Of course, if you don’t want to choose this method, research before online stock trading or try using the web for consultations from an experienced broker.

There is a multitude of advantages to going online and starting stock trading. Online stock trading constitutes of buying and selling shares automatically, almost without any human intervention. The first step is to check out the online brokers, then to open up an account so as to deposit money for stock trading. There is also an execution-only broker which offers no advice and just follows your demands. There is a limited amount of time to accept or turn down the offered price.

Online stock trading is an efficient and secure way to browse the stock market and make investments. You will need a computer, an internet connection and of course the two musts of online stock trading - method and discipline. Understanding money management is another advantage. Actually, not knowing anything about this is the reason why most traders fail even if they take as little risk as possible.

Trading futures is a method used to eliminate or diminish the risks that may appear when the prices in the market fluctuate. Nowadays, trading futures on the web is sometimes preferred to online stock trading, and without question to traditional “live” trading of any kind. A law in the stock trading business states that prices are induced by the supply and demand of the market. If there are more buyers than sellers, prices will go up and the other way around.

A century ago, the stock market was beginning to take shape. It was very different from what we know today as online stock trading. As time moved on, stock trading developed more and more and turned out to be a great way to make money. By giving the investors a variety of choices such as online stock trading, breakout systems, futures trading, hedging, speculation, swing stock trading, the market has become an indisputable opportunity to make a huge profit.

It is crucial to have a realistic plan and not jump ahead before understanding the basics of stock trading. Besides, taking a small amount of time in perusing the rules of online stock trading will surely be rewarding later. Specialists’ advices recommend trusting yourself, choosing wisely, taking responsibility for your actions and staying focused. Do not lose yourself in the vast sea of traders, separate your techniques from the rest and trade cautiously. You also have to understand that sometimes, in order to make money, you have to first lose some and learn from your mistakes. Of course, if you don’t want to choose this method, research before online stock trading or try using the web for consultations from an experienced broker.

There is a multitude of advantages to going online and starting stock trading. Online stock trading constitutes of buying and selling shares automatically, almost without any human intervention. The first step is to check out the online brokers, then to open up an account so as to deposit money for stock trading. There is also an execution-only broker which offers no advice and just follows your demands. There is a limited amount of time to accept or turn down the offered price.

Online stock trading is an efficient and secure way to browse the stock market and make investments. You will need a computer, an internet connection and of course the two musts of online stock trading - method and discipline. Understanding money management is another advantage. Actually, not knowing anything about this is the reason why most traders fail even if they take as little risk as possible.

Trading futures is a method used to eliminate or diminish the risks that may appear when the prices in the market fluctuate. Nowadays, trading futures on the web is sometimes preferred to online stock trading, and without question to traditional “live” trading of any kind. A law in the stock trading business states that prices are induced by the supply and demand of the market. If there are more buyers than sellers, prices will go up and the other way around.

Tuesday, December 12, 2006

No Telling with Nortel

To often beginning investors like to get involved with stocks that have been either focused on the news or provide a name which is recognizable in terms of products or services. While such assessment may be warranted in terms of steady growth and stability, such convictions are not always true and may provide discouragement more often than optimism. The company Nortel, a telecommunication corporation, seems to fit such a sentiment and provides no assurance for further capital gains.

When looking at the aspects of technical analysis over the past five years, Nortel has engaged in some rapid fluctuations creating a vast collage of emotions for investors. After reaching a high near 8.50 during the winter of 2002, shares of Nortel, like most other technological stocks, fell in dramatic fashion to an all time low. Typically, while technological stocks fall during times of recession, a margin of nearly 85% was too high to go unheeded. Such a situation only presented itself as a foreboding venture to be part of. If you were lucky you would have bought the stock at such a low price and intelligently sell such shares when the stock reached yearly highs of 6.00-8.00 nearly one year later. If you were not so lucky and were succumbed to the forces of avarice, as an investor you were put into a world of hurt.

I still remember the day exquisitely. It was near the end of April of 2004, and I turned on my computer to learn about the accounting problems facing the company which eventually transcended into a nightmare of restatements, delayed restatements, corporate official changes, and an ignorant attitude awaiting for the price to reach 8.50 again. However, up to this day such a price has not been reached, and I do not expect such a rise anytime soon.

Sitting on its worst levels of 2.00, the lowest since October of 2002, you would expect such a branded company based in such a sector to be at a 52 week high by now. Nortel, which finished the accounting disarray months ago, acquired competent personal for its front office, expanded its resources and products into emerging nations, recently posted good earnings and revenue margins, provided guidance for increased profit potential, and came off high times of inflation when such a stock usually performs at its best is still at struggling at its 52 week low. With a recession becoming more inevitable everyday, I see no optimism for Nortel, especially because of the cautions institutional investors are placing on this stock. While I do not like telecommunication stocks during such a time period, if you have to pick some stocks of this kind, look a different way, because there is really no telling of the harms that Nortel can cause you.
To often beginning investors like to get involved with stocks that have been either focused on the news or provide a name which is recognizable in terms of products or services. While such assessment may be warranted in terms of steady growth and stability, such convictions are not always true and may provide discouragement more often than optimism. The company Nortel, a telecommunication corporation, seems to fit such a sentiment and provides no assurance for further capital gains.

When looking at the aspects of technical analysis over the past five years, Nortel has engaged in some rapid fluctuations creating a vast collage of emotions for investors. After reaching a high near 8.50 during the winter of 2002, shares of Nortel, like most other technological stocks, fell in dramatic fashion to an all time low. Typically, while technological stocks fall during times of recession, a margin of nearly 85% was too high to go unheeded. Such a situation only presented itself as a foreboding venture to be part of. If you were lucky you would have bought the stock at such a low price and intelligently sell such shares when the stock reached yearly highs of 6.00-8.00 nearly one year later. If you were not so lucky and were succumbed to the forces of avarice, as an investor you were put into a world of hurt.

I still remember the day exquisitely. It was near the end of April of 2004, and I turned on my computer to learn about the accounting problems facing the company which eventually transcended into a nightmare of restatements, delayed restatements, corporate official changes, and an ignorant attitude awaiting for the price to reach 8.50 again. However, up to this day such a price has not been reached, and I do not expect such a rise anytime soon.

Sitting on its worst levels of 2.00, the lowest since October of 2002, you would expect such a branded company based in such a sector to be at a 52 week high by now. Nortel, which finished the accounting disarray months ago, acquired competent personal for its front office, expanded its resources and products into emerging nations, recently posted good earnings and revenue margins, provided guidance for increased profit potential, and came off high times of inflation when such a stock usually performs at its best is still at struggling at its 52 week low. With a recession becoming more inevitable everyday, I see no optimism for Nortel, especially because of the cautions institutional investors are placing on this stock. While I do not like telecommunication stocks during such a time period, if you have to pick some stocks of this kind, look a different way, because there is really no telling of the harms that Nortel can cause you.

Corporate Stock Certificate Kits

A stock certificate is the material evidence of possession of shares in a corporation or company. It reflects legal ownership of a specific number of shares. Corporate stock certificate kits provide tools for managing the issuance and transport of a company’s stocks. A transfer ledger is integrated in corporate stock certificates kit to record the issuance and departure of certificates.

A corporate stock certificate represents the money or property that is invested in a company. It is an illustration of the share of ownership in a corporate production, and is verified by a paper stock certificate indicating the number of shares owned. Since certificates play a significant role, the company’s stock and its records will be treated thoughtfully. This certificate kit can be provided to keep track of stock transfers. This kit also includes a stock checklist, corporate stock certificate, notes regarding stock value and characteristics, receipt for stock certificate and lost stock confirmation statements.

Each stock certificate is numbered and printed with the name, state, capitalization, and signature titles. Additional legends, classes, limitations, and special contents are also available on corporate stock certificates.

There are different types of stock certificates. A standard corporate stock certificate is printed with the corporate name and share information. A custom-printed stock certificate contains the corporate name, share information, state of organization, shares per value, and company logo or custom artwork. These certificates are available in different borders, colors, sizes, and styles.

A stock certificate is the material evidence of possession of shares in a corporation or company. It reflects legal ownership of a specific number of shares. Corporate stock certificate kits provide tools for managing the issuance and transport of a company’s stocks. A transfer ledger is integrated in corporate stock certificates kit to record the issuance and departure of certificates.

A corporate stock certificate represents the money or property that is invested in a company. It is an illustration of the share of ownership in a corporate production, and is verified by a paper stock certificate indicating the number of shares owned. Since certificates play a significant role, the company’s stock and its records will be treated thoughtfully. This certificate kit can be provided to keep track of stock transfers. This kit also includes a stock checklist, corporate stock certificate, notes regarding stock value and characteristics, receipt for stock certificate and lost stock confirmation statements.

Each stock certificate is numbered and printed with the name, state, capitalization, and signature titles. Additional legends, classes, limitations, and special contents are also available on corporate stock certificates.

There are different types of stock certificates. A standard corporate stock certificate is printed with the corporate name and share information. A custom-printed stock certificate contains the corporate name, share information, state of organization, shares per value, and company logo or custom artwork. These certificates are available in different borders, colors, sizes, and styles.

Monday, December 11, 2006

(ND) How To Profit From Online Stock Trading On A Shoe-String Budget

When free is your idea of value for money, chances are… you`re either `dead broke` and too proud to admit it… or you`re an exceptionally resourceful type who hates their day job and could well be suited to a career in online stock trading.

For starters, you DON`T have to be in the Fortune 500 list in order to become wealthy from online stock trading. In fact, apart from your starting capital - which can be as little as `a few hundred dollars` - it`s entirely possible to build a sizeable stock portfolio on shoe-string budget.

In today`s `Internet driven` world, you`re able to access vast quantities of data relating to every conceivable aspect of online stock trading… and a great deal of it`s FREE!

You`ll find discount commission brokerages, charting resources, technical trading tools, free market news sources and free analysis packages available. You can also register for free data feeds offering `up to the minute` pricing information about almost any given stock in the world - as long as it`s currently listed and currently trading.

You`ll note that I didn`t include trading forums or message boards amongst the range of resources available. Believe me...there`s a very good reason for this.

Over the past six to seven years, online stock trading fraudsters have infiltrated the forums and used them to post either false or misleading information about hundreds of stocks. This has led to unjustifiable price surges (often enabling the fraudsters to `sell out` and bag their ill-gotten gains before the prices falter and then plummet back to their previous levels). Not surprisingly, tens of thousands of shareholders have been financially burnt as a consequence.

In short... stay away from online stock trading forums and message boards. I liken them to a `toxic dumping ground for emotionally crippled small-time traders and shareholders who`ve little or no concept of what really determines price.`

Now, on a brighter note...it`s worth mentioning that major investment banks tend to house big stock research teams that cover stocks and their economic performances in great detail. In fact, investment banks are often your best choice when it comes to acquiring accurate and current online stock trading data.

If you`re interested, you`ve got nothing to lose by contacting (by email or phone) a representative from one of these investment banks and asking to be included in their mailing or newsletters lists. Not all such reports and newsletters are available for open online access.

When free is your idea of value for money, chances are… you`re either `dead broke` and too proud to admit it… or you`re an exceptionally resourceful type who hates their day job and could well be suited to a career in online stock trading.

For starters, you DON`T have to be in the Fortune 500 list in order to become wealthy from online stock trading. In fact, apart from your starting capital - which can be as little as `a few hundred dollars` - it`s entirely possible to build a sizeable stock portfolio on shoe-string budget.

In today`s `Internet driven` world, you`re able to access vast quantities of data relating to every conceivable aspect of online stock trading… and a great deal of it`s FREE!

You`ll find discount commission brokerages, charting resources, technical trading tools, free market news sources and free analysis packages available. You can also register for free data feeds offering `up to the minute` pricing information about almost any given stock in the world - as long as it`s currently listed and currently trading.

You`ll note that I didn`t include trading forums or message boards amongst the range of resources available. Believe me...there`s a very good reason for this.

Over the past six to seven years, online stock trading fraudsters have infiltrated the forums and used them to post either false or misleading information about hundreds of stocks. This has led to unjustifiable price surges (often enabling the fraudsters to `sell out` and bag their ill-gotten gains before the prices falter and then plummet back to their previous levels). Not surprisingly, tens of thousands of shareholders have been financially burnt as a consequence.

In short... stay away from online stock trading forums and message boards. I liken them to a `toxic dumping ground for emotionally crippled small-time traders and shareholders who`ve little or no concept of what really determines price.`

Now, on a brighter note...it`s worth mentioning that major investment banks tend to house big stock research teams that cover stocks and their economic performances in great detail. In fact, investment banks are often your best choice when it comes to acquiring accurate and current online stock trading data.

If you`re interested, you`ve got nothing to lose by contacting (by email or phone) a representative from one of these investment banks and asking to be included in their mailing or newsletters lists. Not all such reports and newsletters are available for open online access.

Taking Risks in Stock Market Trading

One general asserted truth is that profit is a goal for many of the men and women who populate this planet. Profit is the more desirable in the case of those who actually invest money because they want to extract even more financial benefits out of these particular investments. One popular way of giving a fertile employment to your money is making them circulate through stock market trading. Share owners can sell, hold their shares or even buy some more, if a series of rules (based either on well-established commonsense practices or on mere intuition) tell them the moment is just ripe for this or that strategy.

As a matter of fact, strategy is one of the terms often heard of in stock market trading. But can anyone talk about a strategy that never failed in this area? This is a frequently raised question, since it is widely acknowledged that the stock market can be tricky. The stock market may easily lead to a downfall in stock market trading. This process takes place, obviously, to the disadvantage of the investor. However, stock market trading doesn’t always end with a loss. Should loss be a certainty, people would no longer invest in the stock market.

Whether we are talking about time-honored stock market trading – taking place within the ‘real’ here and now, on the floors of stock exchange rooms – or about online stock market trading one of the regularly advised strategies is to stick to the trend. Online stock market trading has acquired, in its turn, a value over the past ten years so it can be taken into consideration also. Every stock market undergoes certain (longer) intervals of development manifest in the evolution of stock price. Terms like bull market or bear market are recurrent in stock market trading reflecting either the continuously rising stock prices or the reverse situation. Both online stock market trading as well as its longer-established relative go hand in hand with the progress of the national economy. One example at hand is provided by the extent of a bullish market during the 1990s, determined by the robust national economy of the USA – a genuine initiator of investment confidence. When the situation changed, at the beginning of the year 2000, the market turned bearish and stock prices began falling. In both situations, the advised approach was not to go against the tendency of the market.

Circumstances have long proven it is wise to be consistent with the general trend. Indeed, there is ‘fashion’ within stock market trading as well. And if you don’t want to be outdated – being outmoded in stock market trading may have damaging consequences – you go with the flow. Nevertheless, when someone trustworthy or when some reliable conditions offer you a ‘hot’ suggestion, you may want to act in its direction. Nonetheless, caution, shrewdness and wisdom must be in your proximal reach. This means that you are not to instantly trust any ‘good old pal’ who, out of good-will, provides you with a tip. You must be able to make your own research targeting the tip you received or else request the services of a stockbroker.

One general asserted truth is that profit is a goal for many of the men and women who populate this planet. Profit is the more desirable in the case of those who actually invest money because they want to extract even more financial benefits out of these particular investments. One popular way of giving a fertile employment to your money is making them circulate through stock market trading. Share owners can sell, hold their shares or even buy some more, if a series of rules (based either on well-established commonsense practices or on mere intuition) tell them the moment is just ripe for this or that strategy.

As a matter of fact, strategy is one of the terms often heard of in stock market trading. But can anyone talk about a strategy that never failed in this area? This is a frequently raised question, since it is widely acknowledged that the stock market can be tricky. The stock market may easily lead to a downfall in stock market trading. This process takes place, obviously, to the disadvantage of the investor. However, stock market trading doesn’t always end with a loss. Should loss be a certainty, people would no longer invest in the stock market.

Whether we are talking about time-honored stock market trading – taking place within the ‘real’ here and now, on the floors of stock exchange rooms – or about online stock market trading one of the regularly advised strategies is to stick to the trend. Online stock market trading has acquired, in its turn, a value over the past ten years so it can be taken into consideration also. Every stock market undergoes certain (longer) intervals of development manifest in the evolution of stock price. Terms like bull market or bear market are recurrent in stock market trading reflecting either the continuously rising stock prices or the reverse situation. Both online stock market trading as well as its longer-established relative go hand in hand with the progress of the national economy. One example at hand is provided by the extent of a bullish market during the 1990s, determined by the robust national economy of the USA – a genuine initiator of investment confidence. When the situation changed, at the beginning of the year 2000, the market turned bearish and stock prices began falling. In both situations, the advised approach was not to go against the tendency of the market.

Circumstances have long proven it is wise to be consistent with the general trend. Indeed, there is ‘fashion’ within stock market trading as well. And if you don’t want to be outdated – being outmoded in stock market trading may have damaging consequences – you go with the flow. Nevertheless, when someone trustworthy or when some reliable conditions offer you a ‘hot’ suggestion, you may want to act in its direction. Nonetheless, caution, shrewdness and wisdom must be in your proximal reach. This means that you are not to instantly trust any ‘good old pal’ who, out of good-will, provides you with a tip. You must be able to make your own research targeting the tip you received or else request the services of a stockbroker.

Sunday, December 10, 2006

Do Not be Bearish on Bear Stearns

While many of the stocks I review are of very cheap and volatile nature, there a few which I invest in which do not take these factors into account. Consider the broker Bear Stearns (BSC). Usually when you trade through any broker, the specialist or analyst there is always willing to give advice regarding its own stock. In the case of Bear Stearns, I would argue that it is actually beneficial that investors heed such advice and buy some shares of the company regardless the price.

Speaking in terms of technical analysis, since 1986 when the company released its IPO, the stock has done nothing but increase and grow at high levels. The company's price has increased nearly 250% its first 10 years, 400% the next five years, 110% from 2000 to 2005, and just from 2005 to the present, an increase of nearly 50%. Not even superstar brokers like Goldman Sachs and Morgan Stanley can attest to such growth and stability as each has periods during its stock's history when there were times of high fluctuation. Furthermore through the whole duration since putting the stock on the market, Bear Stearns has never had a dramatic sell off and is currently at the highest levels in its history. Typically, at such high prices I would argue against buying such a stock, but with such amazing growth and stability, there is no avoiding such power and potential.

While some investors may argue the pricing and other areas of technical analysis are a fluke, Bear Stearns supports such data with its fundamentals. Supporting high earnings and revenue with incredible positive margins quarter after quarter, Bear Stearns is still growing and has the potential to reach incredible numbers with its price. The company is also a dividend stock, when such a commodity is rare for an equity that grows this large. With such luxuries, Bear Stearns represents the ability to be any investor's driving mechanism in their portfolio. With unprecedented resistance against most economic indicators, the nature of Bear Stearns represents a stock which can be bought at any level almost guaranteeing a long term profit. While such a stock may not be suited for short term risky investors, Bear Stearns almost always promises a large increase in capital gains for investors looking to hold on to their shares who share the virtue of patience.
While many of the stocks I review are of very cheap and volatile nature, there a few which I invest in which do not take these factors into account. Consider the broker Bear Stearns (BSC). Usually when you trade through any broker, the specialist or analyst there is always willing to give advice regarding its own stock. In the case of Bear Stearns, I would argue that it is actually beneficial that investors heed such advice and buy some shares of the company regardless the price.

Speaking in terms of technical analysis, since 1986 when the company released its IPO, the stock has done nothing but increase and grow at high levels. The company's price has increased nearly 250% its first 10 years, 400% the next five years, 110% from 2000 to 2005, and just from 2005 to the present, an increase of nearly 50%. Not even superstar brokers like Goldman Sachs and Morgan Stanley can attest to such growth and stability as each has periods during its stock's history when there were times of high fluctuation. Furthermore through the whole duration since putting the stock on the market, Bear Stearns has never had a dramatic sell off and is currently at the highest levels in its history. Typically, at such high prices I would argue against buying such a stock, but with such amazing growth and stability, there is no avoiding such power and potential.

While some investors may argue the pricing and other areas of technical analysis are a fluke, Bear Stearns supports such data with its fundamentals. Supporting high earnings and revenue with incredible positive margins quarter after quarter, Bear Stearns is still growing and has the potential to reach incredible numbers with its price. The company is also a dividend stock, when such a commodity is rare for an equity that grows this large. With such luxuries, Bear Stearns represents the ability to be any investor's driving mechanism in their portfolio. With unprecedented resistance against most economic indicators, the nature of Bear Stearns represents a stock which can be bought at any level almost guaranteeing a long term profit. While such a stock may not be suited for short term risky investors, Bear Stearns almost always promises a large increase in capital gains for investors looking to hold on to their shares who share the virtue of patience.

For people who are not inclined to business, the stock market sounds strange. For others, however, the stock market world is something that stirs thei

The SPX daily chart below shows intermediate-term technical indicators remain bullish. However, NYSI (above price chart), which has been making lower highs over the cyclical bull market, suggests SPX may reach an intermediate-term peak in early-September, and fall sharply into October. Also, in early-September, the NYMO 50-day MA may reach an overbought level, around 20, and the CPC 50-day MA may become less bullish (both below price chart).

Last week SPX rallied on a four-day short-squeeze, rising to a three-month high, and closed the week at the high above 1,302. Consequently, short-term technical indicators are severely overbought. The short-squeeze may be completed Monday, if not already finished, and a pullback or consolidation should take place next week. SPX may then rally into the new month and the Labor Day holiday September 4th.

Major resistance levels are 1,300 to 1,310 (extended Price-by-Volume bar of March to May consolidation), and 1,326 (yearly high). Major support levels are 1,290 (early August high), 1,275 (previous support & resistance, 200-day MA, and middle of daily and weekly Bollinger Bands), and 1,261 (breakout point of recent rally, and 50-day MA). SPX may test 1,275 next week, given overbought short-term indicators.
The SPX daily chart below shows intermediate-term technical indicators remain bullish. However, NYSI (above price chart), which has been making lower highs over the cyclical bull market, suggests SPX may reach an intermediate-term peak in early-September, and fall sharply into October. Also, in early-September, the NYMO 50-day MA may reach an overbought level, around 20, and the CPC 50-day MA may become less bullish (both below price chart).

Last week SPX rallied on a four-day short-squeeze, rising to a three-month high, and closed the week at the high above 1,302. Consequently, short-term technical indicators are severely overbought. The short-squeeze may be completed Monday, if not already finished, and a pullback or consolidation should take place next week. SPX may then rally into the new month and the Labor Day holiday September 4th.

Major resistance levels are 1,300 to 1,310 (extended Price-by-Volume bar of March to May consolidation), and 1,326 (yearly high). Major support levels are 1,290 (early August high), 1,275 (previous support & resistance, 200-day MA, and middle of daily and weekly Bollinger Bands), and 1,261 (breakout point of recent rally, and 50-day MA). SPX may test 1,275 next week, given overbought short-term indicators.