What Is A Stock Option?

An option is a contract to buy or sell a specific financial product officially known as the option's underlying instrument or underlying interest. For equity options, the underlying instrument is a stock, ETF, or similar product. The contract itself is very precise. It establishes a specific price, called the strike price, at which the contract may be exercised, or acted on prior to the expiration date. When an option expires, it no longer has value and no longer exists.

Options come in two varieties, CALLS and PUTS, and you can buy (hold or go long) or sell (write or go short) either type. You make those choices - whether to buy or sell and whether to choose a CALL or a PUT - based on what you desire to achieve as an options investor.

A CALL is the right to buy 100 shares of stock at a fixed price per share, any time between purchase of the call and the specified deadline in the future. The time is limited. As a long call buyer, you acquire the right to buy the stock and as a short call seller, you grant the right to someone else. A short call seller (writer) must also be willing to deliver or has the obligation to sell 100 shares at the strike price if the long call buyer (holder) exercises the option.

A PUT is the opposite of a call. It is a contract granting the right to sell 100 shares at a fixed price per share and by a specified expiration date in the future. As a long put buyer, you acquire the right to sell the stock and as a short put seller, you grant that right to someone else. A short put seller (writer) must also be willing to acquire or has the obligation to buy 100 shares at the strike price if the long put buyer (holder) exercises the option.

Long-term Equity AnticiPation Securities (LEAPS) are simply long-term options that expire at dates up to 39 months in the future, as opposed to shorter-dated options that tend to last no longer than nine (9) months.

RISKS WITH OPTIONS TRADING

Option trading is risky so your funds should be your speculative capital or money you can afford to lose. You should only use funds that you are willing and able to comfortably lose.

Investments in the securities markets, and especially in options, are speculative and involve substantial risk. You can lose your entire investment. Individual results may vary from those achieved by our financial newsletter recommendations and no actual investment positions are taken by the newsletter. Only you, with the assistance of a qualified securities professional (personal financial adviser or broker), can determine what level of risk is appropriate for you and how, when, and where you should participate in the options markets. Our recommendations should only be considered by sophisticated investors who are aware of the risks in options trading.

For detail information on options risks, see Chapter X of The Options Clearing Corporation (OCC) "CHARACTERISTICS AND RISKS OF STANDARDIZED OPTIONS" - booklet.

For more information go to http://www.stockoptionking.com/

Article Source: http://EzineArticles.com/?expert=Theodore_Peroulakis

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Basics of Forex Trading

This article gives an introduction about the basics of trading Forex online, a brief explanation of the markets and the major benefits of trading forex online. Foreign exchange or forex are all terms used to describe the trading of the world's many currencies. The forex market is the largest market in the world, with trades amounting to more than 1.5 trillion dollars every day. The foreign exchange market has no central clearing house or exchange and is considered an over-the-counter (OTC) market. Forex traders are generating incredible wealth day after day from the comfort of their home. Foreign exchange is normally traded on margin. A relatively small deposit can control much larger positions in the market.

Forex trading takes place directly between the two counterparts necessary to make a transaction, whether over the telephone or on electronic brokerage networks all over the world. This is a trade that includes simultaneous buying of one currency and selling of another one. There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies, and governments that buy or sell products and services in a foreign country must convert profits made in foreign currencies into their domestic currency. The other 95% is trading for profit, or speculation. The currency combination used in the trade is called a cross (for example, the Euro/US Dollar, or the GB Pound/Japanese Yen.).

The market is called the spot market because trades are settled immediately, or "on the spot". One of the major benefits of trading forex is the opportunity to trade 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT). Unlike stock trading, currency trading on the Forex market is not cut short at the "close" of each day's trading. The benefit of Forex being a 24 hour a day market is that there are little or no gaps in the market, meaning there is no chance that prices will close one day and reopen the next day. The fact that forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis.

Since the market is always moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. Different currencies pay different interest rates. The interest rate differential doesn't usually affect trade considerations unless you plan on holding a position with a large differential for a long period of time. This is one of the main driving forces behind foreign exchange trends. You can have both a positive and a negative interest rate differential, so it may work for or against you when you make a trade. It is inherently attractive to be a buyer of a currency that pays a high interest rate while being short a currency that has a low interest rate. Fortunately, there are no daily limits on foreign exchange trading and no restrictions on trading hours other than the weekend. This means that there will nearly always be an opportunity to react to moves in the main currency markets and a low risk of getting caught without the opportunity of getting out.

A forex trading method with a high winning percentage is rewarding psychologically, keeps your morale high and is enjoyable to trade. A string of profits will build your confidence. Losses have to be kept small and wins should be larger than losses. You can make big money working only a few hours a day or week on your computer. You can trade from anywhere in the world where there is an internet connection.

Andrew Daigle is the owner, creator and author of many successful websites including ForexBoost, a free Forex educational site to learn Forex trading strategies and a ForexBoost blog for keeping online Forex trading records.

Article Source: http://EzineArticles.com/?expert=Andrew_Daigle

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InfiniteLottto

InfiniteLotto [owned and run by a group of Professional Offshore Investors] was founded in March 2000 and have been producing a stable income of around 4% monthly. It has been setup and have run a small but successful investment fund for over 5 years, averaging a return of around 3%-5% per month on investments in a number of markets and companies, concentrating mostly on long term investments. Also a percentage of the funds is traded for futures and commodities.

Profits from trading are paid as prizes to its members. Distribution of profit by chance, may now range from zero to perhaps many hundreds of percent. In general, half the amount is paid as a monthly jackpot and the remainder paid as lesser prizes.

Minimum investment in InfinniteLottto is $100, which is equal to buying 100 tickets. Ticket purchases are defined as loans to InfinniteLottto. You can increase your investment by increments of $10. Each $1 ticket gives you the chance to win a monthly jackpot of up to $50,000 or lots of other cash prizes EACH AND EVERY MONTH, FOREVER !!

The minimum prize amount is $50 and the odds on winning a monthly prize with 100 tickets is 1 in 25. Assuming a monthly profit of 5%, a member with 5000 tickets could expect to win 24 prizes a year. Even if all these were minimum prizes, this would still be a profit of $1200 or 24%, however there is always a chance of a big prize in the mix which would increase this return considerably.

Unlike a normal prize draw you don't lose your money if you don't win! Even more unusual, you can sell your tickets back to InfiniteLottto. Once you buy your tickets they will be in the draw to win big cash prizes, each and every month. If you don't want to play anymore, then you can simply sell your tickets back to them, whenever you please. The minimum number of tickets to sell is 10. There is a 2% or $2 administrative fee on all ticket sales, whichever is greater.

Even if you do not win a prize InfiniteLottto will provide you with a minimum return. In any year that your tickets do not win a prize, InfiniteLottto will pay you 5% rounded down to the nearest ticket subject to overall profits. These bonus tickets will be automatically added to your existing tickets and they will compound annually. This benefit is mainly for those with a minimum number of tickets. As can be seen from the potential winnings above, those with significant numbers of tickets have excellent odds on winning regular prizes.

The first prize draw took place on 7 October, 2004. Prize draws take place on the seventh of each month and all winners are notified by email. Tickets are bought using E-gold and any prizes are paid back to the same E-gold account within 5 days of the draw. All tickets purchased up to and including the last day of the month will be entered into the very next Prize Draw. For example, tickets purchased on 30 November will go into the prize draw on 7 December and every month thereafter.

For many online investors interested in putting up just a few hundred or a few thousand dollars, then InfiniteLottto offers a very serious investment but with the fun and excitement of a potential big win as well. To maintain a successful investment porfolio you need to invest a considerable part of your money into such reliable and low return programs as InfiniteLotto. InfiniteLotto provides a great investing opportunity, with extremely low risk.

InfiniteLottto update can be found at Online Investment Porgrams blog.

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FeederFund

FeederFund is owned by a group of professional investors who are providing service through part of a larger proprietary organisation. FeederFund is incorporated as an IBC in an international tax haven and started operations on 12 October 2003.

FeederFund is a pool fund that enables you to invest in real credible and worthwhile offshore investment programs with low minimal investment. They only supports programs that will provide full disclosure on their principals and investments, and which pass stringent due diligence and risk analysis. FeederFund act as a service facility rather than a being responsible for producing the actual profits.

Most of these investment opportunities have higher minimums, sometimes as low as $5,000, but often $25,000 or even $50,000. FeederFund allows its members to participate in these bona fide programs through a pool fund with a far smaller minimum requirement. A member has the choice of placing amounts down to a minimum of $50, with any of the programs that FeederFund is associated with.

FeederFund currently offers 7 4 investment programs with various monthly interest.
InfiniteLottto (ILC)
Index Trading Systems (ITS)
FX Investment Group (FXIG)
Phoenix Select Holdings Inc. (PSHI)
Northsea Forex Group (NSFG)
JoyFund
Sierra Arbitrage Fund (SAF)

FeederFund is also affiliated with Sensatrust.org. This is an organisation run by a group of offshore investors to hold and validate due diligence information on affiliated organisations. SensaTrust will provide all such information to the relevant authorities in the event of fraud.

As of 12 December 2005 FeederFund is closed to new members. If you are not a member yet, you can't join now.

FeederFund update can be found at Online Investment Programs blog.

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