Compare Stock Trading with Option Trading |
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| Stock Markets function through trading, and give a good indication as to the economic condition of any country. When there is a decline in the stock market it relates to a decline in the business of a country. Alternatively, when we see a rise in the market, this shows an increase in the countries investments and subsequent profits. |
| The traders are the investors of the stock market. It is the choice of the investor as to which trading style they implement. There are many investors who analyse the market and invest accordingly, and there are those that choose Option Trading. |
| Option Trading is a preferred style for many profit loving traders, and is great for short term business, as your money will not be tied to the market. This style ensures that each investment the trader makes will make him a profit. This is due to the reduction of stock values on purchase and therefore a higher profit margin on selling. The brokers fees are higher with option trading as opposed to stock trading, but, with the profit margins higher the fee is affordable. |
| There are many strategies the traders can adopt, and each trader will have his own method. Although option trading gives a good return rate, it is not without risk and has an uncertainty to it. |
| Whatever strategy a trader chooses to use, he needs to have a plan. Whether he uses a known strategy or devises one of his own, he must be consistent with it to realize good returns. |
| If you compare the strategic value of option trading against stock trading, you will notice a big difference. Traders trading the stock market are not at liberty to devise their own plans; they have to follow the rules of the market. They need to learn the weaknesses of the market constantly and buy when the prices are low in order to make a profit. |
| Option Trading - Call Option and Put Option |
| Option Tips from VJonDalalStreet |
