Writing Covered Call

Among the many investment opportunities that exist, option trading stands as both one of the most exciting and risky as well as one that offers some of the best chances for a substantial return. In order to understand option trading, consider first the word “option.” An option is a choice. When you deal in options, you are making a contract that gives you the right, but not the obligation, to purchase a block of stock at a given price at a future date.

Let’s consider an example that could help explain how the option market works. In place of a block of stock, we will use a painting that we discover in a dusty corner of a flea market. The painting has a price of $50, but we do not have that much money available, and will not have it until the end of the week. So, we purchase an option from the owner to buy the painting for $50 by Friday afternoon. We pay him $5 dollars for that option.

Before the week ends, it is discovered that the painting is actually the work of a well known local artist, and has a value of $500. Since we have the option to buy the painting for $50, we quickly exercise our option. When we turn around and sell the painting for $500, we have realized a profit of $445. This is $500 minus $50 for the cost of the painting minus the $5 we paid for the option contract.

There is another way this story can end. Let’s suppose that before the week ends, we learn that the painting is known to have a famous curse, and every owner for the last one hundred years has died a horrible death within a week of purchasing it. We do not have any obligation to buy it, and simply by not doing so, we exercise the negative aspect of our option. We do lose our $5 investment, but that is the limit of our loses.

This fanciful example illustrates the basic principles of option trading. It is quite a bit more complicated in many ways, but these basic principles remain the same. Options are known as derivatives because the value derives from something else. In our example, the value of the painting is what has the underlying value, and the value of the option depends on it.

It is important to understand that options can also be the right to sell at a certain price as well as buy. An option to buy is known as a call. An option to sell is known as a put. Other useful terminology used in Option trading is the strike price. The strike price is the price that has to be reached before a call option can show a profit. In our painting example, the strike price would be $50.

There is much more that must be learned about option trading. It is in many ways an extremely risky investment. It is usually thought to be the kind of investment that is best suited for risk capital. Risk capital is exactly what it sound like, the money that you can afford to lose. With that thought firmly in your mind, you can investigate options in more depth, and you might find that the old adage of investing holds true. In order to really make a good profit, you need to be willing to take some risk. The more you understand about this fascinating investment, the less that risk will be.

GlobalTec announced today the release of the Wizetrade for Options software, a cutting edge options trading tool that combines access to a wealth of information with the latest navigation capabilities traders need to make efficient, effective trading decisions.

In conjunction with the release of Wizetrade for Options, GlobalTec also released an upgraded version of Option Hunter software, its premier scanning tool for options traders. Option Hunter searches thousands of stocks, and tens of thousands of options in seconds, returning only those stock and option candidates that meet the user’s trade style and parameters. These candidates are then plugged into Wizetrade for Options for further chart evaluation.

Based on a patent-pending proprietary algorithm, Wizetrade for Options charts the real-time buying and selling pressures through green and red lines in five time frames that are fully customizable to individual trade styles.

“The key to trading successfully is being consistent, finding something that works, and then repeating the process over and over again,” said John Larsen, product president of Wizetrade for Options. “These two pieces of software help you do that by combining state-of-the-art functionality with an easy to navigate interface that is fully customizable to any individual trade style and risk tolerance.

Using Wizetrade for Options, any options trader can:

1) Track up to 15 stocks at any given time: Build custom baskets of Exchange-Traded Funds, cash indexes or large Cap, mid cap and small cap stocks that can easily be loaded to the Overview Screen with a click of the mouse. The number of baskets is unlimited.

2) Easily filter and sort options chains: In seconds, Wizetrade for Options can help determine which option or combination of options best fit the end-user’s trade style and custom parameters.

3) Manage trades efficiently: The end-user will see at a glance open positions, pending orders, completed transactions and account equity all from within the Trade Manager. Enter equity, options, equities with options, spreads and straddles and strangles with a few mouse clicks.

4) Calculate Risk with ease: Determining entry calculations, stop losses, profit targets, risk to reward ratios and account allocation has been simplified—Wizetrade for Options calculates the numbers for the end-user.

5) Instantly find news: A Calendar feature not only shows what stocks have earnings announcements, stock splits or conference calls coming up, it also allows you to type in any symbol and immediately see vital company information that could impact trades.

6) Trade Journaling: End-user will be able to document each trade with one click, enabling a trader to instantly capture the real-time data and all five charts, underlying market conditions and option chain specifics to store for future reference.

7) Trade live through an integrated broker: Wizetrade for Options is fully integrated with optionsXpress (NASDAQ: OXPS), a leading online brokerage—meaning it is not necessary to leave the software to submit orders. Easily switch from paper trade (practice mode) to live mode with the click of a mouse.

Wizetrade for Options is the latest addition to a full line of cutting edge trend recognition software produced by Dallas-based GlobalTec, a nationally recognized investor training organization and provider of software, trading tools and training for individual investors. This product suite includes Wizetrade, 4X Made Easy, Commodity Explorer and CommandTRADE.

Option Hunter software includes customizable alerts that trigger when trade parameters have been met, a Scan Builder Wizard for constructing custom scans and the capability to customize scan results.

If you’ve been taking photos for a while now and are thinking of turning professional, trying to turn your hobby into a part time business, or just want to make a little extra cash to pay for the new lens you’ve been drooling over, there are many options for sales outlets. This article takes a look at just some of the possibilities.
Stock Photography Agencies
Stock agencies are libraries of images where someone who needs to use an image for a purpose such as a newspaper or magazine article can purchase a license to use the image. These days almost all stock agencies have online collections, where people can search the library, pay and download the image immediately.
The advantage of stock agencies is that they market your images for you. This can be a big plus in the online world, as you are able to show your photos through an established website without having to build one. Associating yourself with a reputable agency will also add to your credibility as a professional.
The downside of selling stock photography is that it is a numbers game. You will need a large collection of images to be able to earn an income. You will also pay commission to the agency for each image sold. This can range from 20% to 50%. Agencies also expect regular submissions to keep their libraries current. So you need to think of an agency as a business partner.
Your own website
Having your own website has the advantage over a stock agency website of being all about you. A website devoted to your own images rather than sharing with competing photographers has huge potential for gaining exposure and sales because of the size of the web. The downside of having your own website is that you need to put a lot of work into designing a website that shows off your work and can bring customers. This can be expensive and time consuming, and is better thought of as a long term strategy.
Offline
With the internet boom it is easy to forget old fashioned methods. Art fairs or markets are a great way to show your work to potential buyers. You also have the huge advantage of meeting customers face to face and being able to talk about your photos and answer questions. You also have the chance to sell yourself and gain peoples trust, which is half the battle of selling anything.
The downside of exhibiting your work this way is that it can be expensive to display. The costs of framing your prints, setting up a display and paying stall fees all add up. You also need to keep in mind that your potential customer base is much smaller than the global reach of the internet
So which method is best? The truth is there is no right or wrong answer to this as different methods will work for different photographers depending on where you live, the type of photography you do and the number of images you have. The best option would be to combine all of the above and get your work out there to as wide an audience as possible.

Most people lose money in a bear market. Do you remember the tech bubble and recession in 2000-2002? This article will discuss three option trading strategies that can make you big profits in a bear market or recession.

Option Strategy No. 1 – Buying Put Options

It is fairly easy to purchase put options. This option trading strategy can even be used in an IRA account as long as you have been authorized by your broker. You desire to select a stock, which you feel has a good chance of going down in price. Your risk will be limited to the cost of the put option. For example, stock XYZ is currently trading at $50 per share and you buy a put option on XYZ with an expiration date of two month later with a strike price of $50. If the stock drops from $50 to $40, your put option would be worth $10 per share.

Option Trading Strategy No. 2 – Buying Bear Put Spread

Buying a put spread is a little more complicated than just buying a put option but gives you the benefit of reducing your cost but caps your profit. A put spread is characterized by the trading of two same month expiration put options, buying one at a given strike price and selling the other put option at a strike price lower than the purchased put option. You want to pick a stock that you believe will be falling in value. Your risk will be limited to the cost of the put spread. As an example, if we purchase the put option as listed above but also sold a put option with a strike price of $45. In this example, should the stock plunge to $40, you would profit $5 per share ($50 strike price – $45 strike price). And while you are making less per share, your savings comes in the fact that the cost of buying the put option outright would be much higher than the initial cost for the bear put spread.

Option Trading Strategy No. 3 – Married Put

Risk can be minimized by utilizing a married put, which is a hedging strategy. This strategy consists of purchasing a stock that you believe will appreciate in value and buying a put option at the same time to minimize any losses due to adverse market movement. You might have heard the saying that there is always a bull market going on somewhere. In order to benefit from this strategy find out what business sectors and securities go against the grain and appreciate in a bear market. Next you buy the stocks you chose and protect your investment by buying a put option to limit your losses if the stock goes south.

In conclusion, you can still make big profits in bear markets by looking for stocks that you think are going to fall in price and buying a put option or a bear put spread. Alternatively, you could buy a married put on a stock in a sector you believe is going to appreciate, thus minimizing your risk. In addition to buying options on stocks, you can also buy put options on exchange traded funds or index options. Exchange traded funds let you invest in global markets, commodities and even currencies. It is possible to receive a large profit in a bear market. However, it is vital to comprehend the details of the option strategies, choose the correct stock, exchange traded fund or index option, and make use of a proven tactic and begin.

Disclaimer: This article should not be used as financial advice; it is only for informational purposes. Be sure to contact your financial advisor prior to making any decisions on investing.

BSE Sensex (9690.07) and Nifty (2921.35) closed 8.1% and 7.6%  up last week.Nifty put-call ratio was 1.00.Support for Sensex is 9280 and for Nifty 2780.Resistance for Sensex is 9920 and Nifty is at 3000.Inflation was also under control 8.00 v/s 8.40 last week.Crude oil was at 48$.Market recovered from low levels on rate cut of 100 basis points of Repo and Reverse Repo cut by Reserve Bank Of India.Positive statement by Mr Monteksingh Ahluwalia, Deputy Chaiman Planning Commision that growth rate would be maintainted at 7 %. Held the market tight.Market also took the note of  Mr. Kamalnath,Commerce Minister that there could be second round of stimulus package in offing.Economic package declared on Saturday woth 28300 Cr for housing and infrastructure for 21 projects along with 4% excise duty cut in automobiles aided the sentiment to positive side.IIP nos.were down by 0.4% during October but after initial knee jerk reaction market again went up on sustained FII buying..Even the negative impact of $14 billion package not sanctioned by U.S.Senate for automobile sector which could hurt General Motors and Chrysler was absorbed by the market smartly. Buying of FII was visible…Nifty 2900 call option  added open interest.Reliance    and  Reliance Capital   added open interest.ICICI Bank  and Bank Of India  lost open interest.

 

Strategy for Future Option players.

 

1)Reliance(1307.10)  Lot Size-75 Shares.

 

   Buy one call option of December month strike price 1290@72.00 Rs.

 

   Sell  one call option of December month strike price 1380@36.00 Rs.

 

   Premium Paid=72*75=5400.00 Rs.

 

   Premium Received=36*75=2700.00 Rs.

 

   Net Premium Paid=5400.00-2700.00=2700.0 Rs.

 

   Maximum Profit=1380-1290=90*75=6750.00-2700.00=4050.00 Rs.

 

   Maximum Loss=2700.00 Rs.

 

   Break-even=1326.00 Rs.

 

2)BPCL(355) December  month future-Lot Size 550 shares.

 

    Buy one lot  December month 355.00

 

    Sell  one call option of  December month strike price 360@7.00 Rs.

 

    Premium Received=7*550=3850.00  Rs.

 

    Max Profit=360-355=5+7=12*550=6600.00Rs.

 

    Max loss=Unlimited.

 

Trading Idea

 

1)TVS Motors(25.55)Buy this stock in decline and trade.

 

2)Union Bank(146.55)Buy this stock in decline and trade.

 

Trend of Major Stocks

 

 

 

 

 

            STOCK                        TREND          NO.OF Days   Weekly          Monthly

 

                                                                                                  Trend             Trend

 

           ICICIBANK.NS         Bulllish  7          Rising  Rising  

 

            INFOSYSTC.NS        Bearish 2          Rising               Falling 

 

            ITC.NS                        Bulllish  1          Rising  Rising  

 

            MARUTI.NS               Neutral             1          Rising  Falling 

 

            SATYAMCOM.NS    Bearish 2          Rising               Falling 

 

            SBIN.NS                     Bulllish  7          Rising               Rising  

 

            TATASTEEL.NS         Neutral             1          Rising  Rising  

 

            TCS.NS                       Bearish 2          Rising               Rising  

 

 

 

Technical indicators of major Stocks

 

MFI=Money Flow Index

 

RSI=Relative Strength Index

 

ADX=Directional Momentum Index

 

 

 

STOCK                          CLOSE       MFI-21 RSI-14 ADX-14         

 

 

 

 

 

 

 

 

 

ICICIBANK.NS                411           45.84   56.27   17.01              

 

INFOSYSTC.NS        1104.85           41.5     37.92   22.94              

 

ITC.NS                           172.4            44.36   53.74   13.7                

 

MARUTI.NS                507.05            51.94   43.57   29.46              

 

SATYAMCOM.NS    220.55             33.32   37.41   32.44              

 

SBIN.NS                    1216.85            40.28   53.4     20.31              

 

TATASTEEL.NS         218.85              56.37  56.84   28.44              

 

TCS.NS                         481.3              55.24  40.94   14.21              

 

 

Website narendranainani.blogspot.com.

 

A lot of traders now favor option stock trading because of its many advantages. For one it can be highly profitable if used rightly, it offers the investor more flexibility and a larger option to diversify. This trading system offers more protection to the portfolio gives more control to the investor and offers a higher possibility to generate more returns on investment. They can be used under any market condition. They offer the investor the advantage of making returns on a change in stock price without actually owning the stock. Options stock trading can be used in combination with other option contracts and/or other financial tools to maximize returns.
Furthermore, a lot of trading is done on the floor of the stock exchange; one of such is referred to as stock option trade. Sometimes the trading could just be more of speculative activity. Speculative activity trading is done on stock exchanges through stock options trading. The term option in stock parlance means “a right”. There exists the right to sell as well as the right to buy. In a deal involving an option, the right to buy or sell a certain amount of securities, within a particular period at a given price can be bought off a dealer. If the purchased right was an option to buy securities it would be called a “call option”. If the right was the option to sell, it is called a “put option”. Instances where the two possible options are combined, to buy or sell a certain quantity of securities at a particular price up to a given future date, it is then referred to as “a double option”, or “a put and call option”
Speculative activity or stock option trade is carried out for anticipated profit. Here is how it works. If a speculator expects the price to go up, he buys a call option. This allows him in future when the price has arisen to buy at the old lesser price and sell at the higher prevailing price. When the reverse happens and a drop in price is anticipated he buys the put option.
When a speculator notices that his predicted or expected rise or fall in price did not occur he can chose not to exercise his right or stock trade option that he had purchased. The party that grants or sells the stock option trade to the speculator is paid a premium for granting it.
This premium is also called the option money. This is the fee that is earned by the trader who grants the speculator the stock option trade. When the speculator desires not to exercise his option he loses the option money or premium. But his loss is restricted to the option money alone. Stock option trade is useful for speculators who want to protect their capital and yet seize advantage of fluctuations in prices. He has the choice to decide whether to exercise his option or not.

How many times have you placed an order to buy a stock and immediately sat and watched as the darned thing falls apart in front of you?! A few we’d bet because it has happened to all of us at one point or another. The real difference is what you do about it.

Unless you are so rich that losing money doesn’t hurt you, we would venture a guess and say that you generally do a little homework before you place your hard earned money in a stock. Well, if you have taken a recommendation, done your homework and decided that the XYZ stock is a good buy, but the minute you buy it it starts falling, you have to do some quick decision making.

First off, how is the health of the overall market? As you know (from us preaching it to you) it is the “tone” of the overall market that determines on a day to day basis if stocks are going to rise or fall. In other words, if the NASDAQ is down 100 points from the open, unless XYZ had some big news, it is probably in the toilet too. So, before a total panic, look at the health of the market first, this is where the BONUS SITE also comes in handy.

Okay, the market is fine, the NASDAQ is up 35 but the stock you bought for 50 is now at 48 and still sinking. Now what? Next, did it gap up 5 bucks from yesterday? In other words, did you buy at the morning’s high and now it is just “closing the gap?”

This is why we say “don’t buy the opening gap” folks, often it is the very high of the day and never gets back there. This is a good time to review the special report on TRADING GAPS.

Okay, the market tone is good and we didn’t buy at the morning high, now what? This is the tough part. If all our research and homework says XYZ is a good buy, but the street starts to sell it off, we have found it is best to hop back out and take your loss rather than “hoping” it back up. In other words, never go against the market. Remember the old adage “don’t fight the tape?” Well that means no matter how good something sounds, if the street doesn’t want it, it isn’t going up friends. In times like that it is often best to set your stop and obey it. If you get stopped out, sure it could rebound and fly for a ton, but it may have just saved you from a nasty beating.

More times than not a stock that looks good and has a lot going for it, gets some very special “manipulation” from the market makers. Their job is to make money and they know full well what’s hot and what’s not. If you play this game long enough you will see some of the oddest moves you could imagine and all of them are intended to get your money! So, sometimes when we have a good stock that is going completely the wrong way on a good day, it has a lot to do with “where the big guys” want the price on that day. You will often find that selling back out and “re-buying” some right before the close will reward you the next day.

One last note about this topic. There are times when you simply made a bad move. Maybe you hopped on a high flyer right at the very top, or maybe the stock you just bought gets a mid day downgrade and falls like a rock. But, one of the most important aspects of trading is getting a good “entry”, so, if you enter something and its falling on you, don’t wait around too long to see where the faling stops, get back out quickly. There is a big difference there. For instance, let’s say we buy XYZ at 50 and it ends the day at 52. Now the next day it pulls back to 51.25, should we dump? Probably not, it is just clearing its throat. But, if we buy something at 50 and ten minutes later its 48.50, we didn’t get such a great entry price did we? No, and we don’t know when it will stop either. We wouldn’t let a situation like that get out of hand, because if we hold it and it ends the day at 47, we have to have a darn nice day the next day, just to break even.

The bottom line is that we need to assess the best possible entry period on an issue so that we get some profit right away.

That way we can “live with” a bit of a pull back and still be in a winning position. History has shown us that if we buy something and immediately start losing on it, we probably could have picked a much better entry price and will bail out quickly with a small loss versus riding it down. We will expand on “entering” a stock in another issue.

Ordinary people think that trading in the futures and options markets is always dangerous in nature. It has a name for being dangerous, but this is a misconception about options dealing. While it may be true that trading in the futures and options markets is extremely risky, it can be highly profitable if you are provided with great trading talents and strategies. Like any other kind of offline or online trading, it involves risk and uncertainty. If you have insufficient data in trading, you’ll probably suffer more losses. I want to begin with the basics of trading in the futures and options markets, its introduction in the United States and how it becomes moneymaking to many and a losing venture to others. Granting another a right to purchase or sell something in the future is what’s involved in an option. When one gets a call option in a Dow index future options, he’s buying the right to purchase that Dow future at a particular price (called ’strike price’) and time (called ‘expiration date’) in the future. Trading in the futures and options markets can be understood as: 1) when a trader gets a put, he sells the market since a call buys the market, and 2) when a trader sells a put, he buys the market since a call sells the market. A ‘premium’ is paid by traders so they can buy an option on this future. The option is rendered worthless on expiration date if the futures and options market doesn’t make the option’s strike price. The future will be given to the trader at the specific strike price if the futures and options markets do not reach the option’s strike price on the expiration date. So, when did trading in the futures and options markets begin? The futures and options markets trading as well as stock trading started in the 19th century. Trading in the futures and options markets officially started in 1848. That’s the time the Chicago Board of Trade was established and trading of options contracts commenced in the US. When the Kansas City Board of Trade, Minneapolis Grain Exchange and the New York Cotton Exchange also began in trading of options contracts, other exchanges started to trade options as well. Newspaper advertising was employed that time to enable options buyers to find options sellers. However, trading in the futures and options markets was not popular that time due to low liquidity. By mid twentieth century, the Chicago Board of Options Exchange was established which led the way for trading in the futures and options markets. Due to the options’ increase in liquidity, many people were drawn to partake of in futures and options markets trading. Another critical milestone was achieved in 1977 when options puts started to trade on the Chicago Board of Trade. In 1985, the NYSE and the NASDAQ began to trade equity options contracts. Since that time, futures and options markets trading has been one popular way of investing into the market. The reason for this popularity is high liquidity and great leverage. Today, there is a wide selection of options that exist in the futures and options markets. Options on equities, futures, indexes and currencies might be considered by investors. Regarded as one of the high risk kinds of investment, futures and options markets trading can render a trader to lose all capital invested. It is, therefore, strongly advised that the trader first gain enough knowledge and appropriate skills about the trading technique before actively joining in it. A trader can lose all capital invested if he engages in the futures and options markets trade with wrong information. I have mentioned some basic terms above. Knowing these terms will pay off later. It is also vital to be able to discern the difference between the two types of options as you will stand to lose all of your capital if you are confused about their difference.

First and foremost, look for stock photography sites. These are popular sites who invite young talents to stock their best art pieces and photographs with them. Now these photographs are viewed by potential visitors belonging to varied walks of life like, web designing, interior designing, editing, advertising et al. If they are impressed by the photograph, they download it for free. The main advantage of these sites that entice a lot of art lovers is the free download option which enables them to search and save the best piece of art for them. However, the site seeks around 50 %-70% of commission as compensation against every download.

Some of the most visited stock photography sites include, iStockphoto, Stockexpert, Fotolia, Crestock and Dreamstime. iStockphoto is one of the most popular pick by many photographers owing to its great reputation ever since its existence in 2001. It boasts a higher traffic due a vast stock of fascinating photographs and pictures of experienced photographers. This means that stocking your photograph on this site would ensure it being exposed and viewed by a wide belt of targeted audience like web designers, advertisers etc.

Stockexpert is yet another sought-after site visited for its reputable stock of photographs. The site is popular owing to its considerably low-priced photographs open for sale for both the stockexchange team as well as the wide-spread online consumers. The rest of the sites have the same underlining function, however, their terms and modes of payment to the artists may vary. All these sites just offer you a free sign-up form to access its membership and apart from free downloading options, some facilitate the option of reviewing photographs by online visitors.

Other than the above mentioned sites, there are some other sites that offer entertaining modes to market your photographs. Sites like Cafepess, Phototrade give you the opportunity of embedding your pictures on mugs, T-shirts and other accessible items to sell your photographs in unique and attractive modes. You may also come across sites that seek membership payment from you and in return access viable marketing tools to attract hits from targeted visitors across the globe. Shutterpoint is one such paid site that demands a requisite member fees ranging $19 to $49, depending on the kind of membership availed.

The use of stock options in a downward moving market is an optimal time for them.  In general, when equities are going downward they do so at a very quick pace   This is exactly the  best time to make use of the inherent properties that equity options have.  The main problem of stock options is the time value that one must pay.  When stock prices are changing swiftly, that makes time much less of a issue.  I have outlined several methods below to take advantage of this market condition.Purchase PutsThis is the easiest tactic to use.  A stock put is simply the right to sell a certain stock at a particular price (named the strike price) before a certain date (the expiration date).  It makes perfect sense to just simply buy a put.  Particularly if you already own the stock.Sell a Call OptionThis is often referred to as a naked call.  It is simply selling a call on a particular astock. When the equity goes downward the value of the call will go to nothing, therefore you keep the benefit! This can be a little harder employ as there are some regulations that one must coalesce to.  The easier method is outlined in the next step.Sell a Covered CallIn this case the capitalist is simply selling a call on an stock which he or she presently owns.  There are much less hoops to jump through as far as margin requirements and the like when you own the underlying stock.  One may due this if you don’t want to get rid of you equity for a loss, but still make some profit before it starts to rebound later.Buy Index PutsThis is a way to catch the market movement as a whole and in a sense diversify your portfolio.  The most standard index options are the S&P 500 options.  They are very liquid and have a high volume of trades every day.  That my not be the case with individual equities which can have low option volumes and very high bid to ask spreads.Employ a Bear Put SpreadThis is a more advanced option strategy, but it has the benefit of reducing your risk.  A bear put spread  is when an individual buys a put at a particular strike price (say 55) and sells a corresponding put at a lower strike price (say 45).  Both stock options should be for the same month.  Otherwise you are placing what is called a bearish calender spread.  You could use this strategy if you believe the equity in this case will fall below 55 but remain above 45.  This is for use in more moderately down trending markets.ConclusionThese are just several of the many good ways to make money using options in a down market.  Option trading is of course risky and is not for all.  However, if used properly can enhance the performance of your amass portfolio greatly.