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  • I Advice - Your Mother Was Wrong About Stock Options

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    rities can use options to control stock, without actually taking ownership of the stock. Options can also be used to protect stock holdings from loss, speculate in the market, generate recurring income, and to enhance the overall return of stock holdings. All of these things are possible without exposing yourself to undue risk.

    USING CALL OPTIONS INSTEAD OF BUYING STOCK

    If you believe that a company's stock is poised to appreciate and it is currently trading

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    If you ask your mother about stock options, she will tell you that they are too risky for you to play with. As wonderful as she may be, in this particular case, mother does not know best.

    Exchange traded options came into being for the purpose of reducing investors' risk in owning or acquiring stock. Even mother owns shares of some venerable old companies. What mom may not realize is that even her portfolio of blue chip stocks is subject to market losses.

    STOCK OWNERSHIP INVOLVES RISK

    A stock investor is always at risk of losing significant amounts of capital. Diversification can help offset some of the risk, but even diversified mutual fund holdings are not immune from market declines, such as those seen in 2000-2002.

    A traditional stock investor can only protect their holdings by divesting themselves of their investments. In other words, a stock investor must sell some or all of her stock portfolio to reduce market risk. Stop loss orders are sometimes used to exit positions that decline in value, but such orders cannot guarantee an exit point.

    OPTIONS USED TO REDUCE MARKET RISK

    Stock options are either "call" options or "put" options. A "call" option is a standardized contractual agreement that gives the buyer of the option the right to buy 100 shares of stock at a specified "strike" price on or before a specified "expiration" date. A "put" option gives the option buyer the right to sell 100 shares of stock at a specified price on or before a specified "expiration" date.

    Options may also be sold short, in which case the seller of a call option has the obligation of delivering the shares of stock and the seller of a put option has the obligation of purchasing shares of stock. Because you are incurring an obligation when you sell an option contract, you potentially incur substantial risk.

    An investor or trader in securities can use options to control stock, without actually taking ownership of the stock. Options can also be used to protect stock holdings from loss, speculate in the market, generate recurring income, and to enhance the overall return of stock holdings. All of these things are possible without exposing yourself to undue risk.

    USING CALL OPTIONS INSTEAD OF BUYING STOCK

    If you believe that a company's stock is poised to appreciate and it is currently trading

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    OCK OWNERSHIP INVOLVES RISK

    A stock investor is always at risk of losing significant amounts of capital. Diversification can help offset some of the risk, but even diversified mutual fund holdings are not immune from market declines, such as those seen in 2000-2002.

    A traditional stock investor can only protect their holdings by divesting themselves of their investments. In other words, a stock investor must sell some or all of her stock portfolio to reduce market risk. Stop loss orders are sometimes used to exit positions that decline in value, but such orders cannot guarantee an exit point.

    OPTIONS USED TO REDUCE MARKET RISK

    Stock options are either "call" options or "put" options. A "call" option is a standardized contractual agreement that gives the buyer of the option the right to buy 100 shares of stock at a specified "strike" price on or before a specified "expiration" date. A "put" option gives the option buyer the right to sell 100 shares of stock at a specified price on or before a specified "expiration" date.

    Options may also be sold short, in which case the seller of a call option has the obligation of delivering the shares of stock and the seller of a put option has the obligation of purchasing shares of stock. Because you are incurring an obligation when you sell an option contract, you potentially incur substantial risk.

    An investor or trader in securities can use options to control stock, without actually taking ownership of the stock. Options can also be used to protect stock holdings from loss, speculate in the market, generate recurring income, and to enhance the overall return of stock holdings. All of these things are possible without exposing yourself to undue risk.

    USING CALL OPTIONS INSTEAD OF BUYING STOCK

    If you believe that a company's stock is poised to appreciate and it is currently trading

    The Lowdown on United Mileage Plus Visa
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    market risk. Stop loss orders are sometimes used to exit positions that decline in value, but such orders cannot guarantee an exit point.

    OPTIONS USED TO REDUCE MARKET RISK

    Stock options are either "call" options or "put" options. A "call" option is a standardized contractual agreement that gives the buyer of the option the right to buy 100 shares of stock at a specified "strike" price on or before a specified "expiration" date. A "put" option gives the option buyer the right to sell 100 shares of stock at a specified price on or before a specified "expiration" date.

    Options may also be sold short, in which case the seller of a call option has the obligation of delivering the shares of stock and the seller of a put option has the obligation of purchasing shares of stock. Because you are incurring an obligation when you sell an option contract, you potentially incur substantial risk.

    An investor or trader in securities can use options to control stock, without actually taking ownership of the stock. Options can also be used to protect stock holdings from loss, speculate in the market, generate recurring income, and to enhance the overall return of stock holdings. All of these things are possible without exposing yourself to undue risk.

    USING CALL OPTIONS INSTEAD OF BUYING STOCK

    If you believe that a company's stock is poised to appreciate and it is currently trading

    A Day in the Life of an Internet Marketing Consultant
    Having been inspired by seeing many recent articles about a day in the life of a web developer I decided to give an insight into a typical day for an Internet marketing consultant. This will obviously vary depending on the workload at the time, but typically this is the kind of timescale I would follow:9am-10am Check overnight emails, reply to clients and delete spam!10-12pm Monitor the previous days Google AdWords and Yahoo Search Marketing performance for client accounts, ensuring the budget is being put to good use and making changes to increase conversion rates, click through rates, lower costs etc.12pm - 1pm Catch up on the latest industry news using an RSS reader to get updates from sites such as Search Engine Watch, ThreadWatch, WebProNews, Digg, Matt Cutts' blog etc. I think it's important to kee
    on buyer the right to sell 100 shares of stock at a specified price on or before a specified "expiration" date.

    Options may also be sold short, in which case the seller of a call option has the obligation of delivering the shares of stock and the seller of a put option has the obligation of purchasing shares of stock. Because you are incurring an obligation when you sell an option contract, you potentially incur substantial risk.

    An investor or trader in securities can use options to control stock, without actually taking ownership of the stock. Options can also be used to protect stock holdings from loss, speculate in the market, generate recurring income, and to enhance the overall return of stock holdings. All of these things are possible without exposing yourself to undue risk.

    USING CALL OPTIONS INSTEAD OF BUYING STOCK

    If you believe that a company's stock is poised to appreciate and it is currently trading

    Google Big Daddy SearchQuake About to Rock Your Ranking?
    Running ranking reports for clients is a standard part of an SEO's job. This week I created a position report for a client - one for which we'd made significant gains in ranking for their targeted search phrase - and proudly sent off the report to them before a scheduled conference call to discuss our progress and status.The client sent an email upon receiving the report saying "There is something wrong with your report - we rank higher than this report claims." I went back to Google and typed in the search phrases to find rankings exactly where the report showed them the previous day.I explained to that client that Google has (at last count) nine data centers which serve up search results and that they were getting results from a data center in the Eastern US which showed differing results from res
    rities can use options to control stock, without actually taking ownership of the stock. Options can also be used to protect stock holdings from loss, speculate in the market, generate recurring income, and to enhance the overall return of stock holdings. All of these things are possible without exposing yourself to undue risk.

    USING CALL OPTIONS INSTEAD OF BUYING STOCK

    If you believe that a company's stock is poised to appreciate and it is currently trading at $30.00 per share, you can purchase 100 shares of the stock for $3,000.00. Your maximum risk on the trade is $3,000 and your upside potential is virtually unlimited.

    Alternatively, you could purchase a call option for a fraction of what the underlying stock might cost. As the owner of a call option you would have the right to buy the underlying stock at a pre-defined "strike" price. Instead of paying $30 per share, you might only pay $2.00, perhaps less, for a call option that gives you the right to buy the stock at $30 per share.

    Buying the call option for $2 per share allows you to control 100 shares of stock until the option expires. Assume that the stock behaves as expected and it appreciates to $40 per share. If you had bought the stock, you could now sell it and realize a $10 per share profit. This represents a gain of 33% on the capital invested, which is a very good return.

    Our call option has also appreciated in value because we have the right to buy the stock at $30 per share even though it is now trading at $40 per share. We paid $2 for the call and it is now worth at least $10, representing a minimum profit of $8 or a return of 400%!

    Stocks do not always behave as we expect, however. Let us assume that instead of rising in value the stock dropped in price and now trades at $25.00 per share. If we bought the stock, we would have seen our position drop in value by $5 per share. When we bought the call option, we limited our risk of loss to our purchase price so our maximum loss is $2 per share.

    Call options are ideally suited for use when you expect a stock to make a significant move in the market. The use of a call option allows you to commit a relatively small amount of capital to control stock for a set period of time. If you are correct in your expectations of stock movement, you can capture the positive price moveme

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