A Few Things to Know About ASX Options

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One question that most novice investors seek answers to is, what is options trading? Many investors stick to stocks, mutual funds and bonds, but they stay clear of options. Is options trading too risky? Are options too complicated? Here are some things that investors should know about the options.

Options trading in Australia is less risky than trading stocks. The popular “buy and hold” stoA Few Things to Know About ASX Optionsck trading strategy can be very risky. Stock market volatilities have completely wiped out many people’s retirement plans. Some are still trying to recover. There are limited choices while trading stocks. Options trading, on the other hand, is mostly short term, and it takes advantage of upward, downward and even sideward trends in the market. There are different options trading strategies available that offer a much lower risk profile than traditional “buy and hold.”

Like any other securities, ASX options can be risky. The biggest problem with options trading is not its inherent risk, but the greed of the investors. People falling for “get rich quick” schemes get into trouble. To be successful, investors need to have a good options trading plan, and they need to stick to the trading rules. This is essential because some–NOT ALL–options trading strategies carry the risk of 100% loss. A good ASX options advice can be helpful.

Options trading in Australia does not require superior analysis skills. Some analysis skills are required, but not as much as it requires with stock trading. When you are trading stocks, you need to have skills for both fundamental and technical analysis. Fundamental analysis helps pick a good company, and technical analysis helps pick the right trade. On the contrary, options trading is simple. Each options strategy has its own shallow set of technical indicators. For instance, when selling credit spreads, the investors only need to know how to identify the trend and how to select resistance and support levels.

Options trading in Australia does not require a big time commitment. With options trading, it is possible to grow the portfolio steadily every month with less than two to three hours of work per week. For experienced investors with day-trading style, however, options trading can certainly keep them occupied.

Options trading in Australia does require an active involvement, but it can deliver steady, solid growth in all types of market conditions. If you are a first-timer, start with low-risk options strategy and build your experience and knowledge. Further, it can be a good idea to team up with professionals who can provide ASX options advice along with proper Australian options education. This way, you can start safely with options trading in Australia.

Simple Australian Share Market Tips

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If you are contemplating about ways through which you can generate consistent monthly income, then investing in the Australian share market can be a good idea. The Australian share market, the ASX or Australian Securities Exchange, is one of the biggest listed exchange groups across the world. It has a considerably huge daily turnover, and it offers many products and services (trading tools like shares, options, futures, etc.) through which investors can yield excellent returns. A word of caution though, the share market game is a double-edged sword – investors can lose money as well. Nevertheless, there are ways by which you as an investor can minimise risks and improve the chances of better returns. Consider below Australian share market tips that may help you form an investment strategy.

Do not put your entire capital or most of your capital into any one investment

It is a poor choice if you Australian Share Market Tipsput everything into a single investment. You will, of course, resent yourself when a certain company goes up 200% or 400% overnight, and you were going to invest every dollar you got in that company; however, this agony is far less than losing everything in case the company goes downward. Even though it is a basic rule, it is effective to diversify your portfolio, i.e. invest in different stocks.

Before you invest, consider all the bad things

If you think that there is nothing bad about the investment you are considering making, then you need to give it a second thought. All investments carry some sort of risks. Get some Australian share market advice and know the risks of the investment you are contemplating on making. After you know what the risks are, ask yourself if the expected return you may get is worth it.

Always have a disaster plan

It is always a good idea to have a disaster plan for that “just in case” reason. As said earlier, the share market game is a double-edged sword where you can gain or you can lose. Remember, even if the market trend is strong, volatility still exists in the share market. You need to be ready for the trouble just in case your strategy fails or the market crashes. Ask yourself these questions:

  • When should I take the quit if the value of my shares began to fall?
  • What types of losses can I manage?
  • What will happen when I get a margin call? Should I keep the cash ready for such a situation?
  • Can I handle negative returns for some time?

Get professional Australian share market advice

You might be an expert, but sometimes you may come across a situation when you require an expert Australian share market advice. Do not hesitate; take the advice when the situation calls. Find and partner with someone who is an expert in giving good stock market advice in Australia. Such experts have the experience and skills in performing technical and financial analysis. They can help you make wise investment decisions.

Australian Share Market Advice for Those Who Want To Get Into the Share Market Game

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Do you want to get into the Australian share market, but do not know where to start? Have you seen your co-workers, family members or friends make money through share market and wish that you could make some money too? Below are some Australian share market tips that may help you get started, with the share market game.Australian Share Market Advice

Get the clear idea about the share market

When it comes to share market, there are many financial terms that may overwhelm you. Do not let it overwhelm you. It may be difficult at first to understand, but learning the financial jargons will help you become a well-informed share market player. There are many online websites available that will help you get a clear idea about the share market and its terms or jargons. Reading business and financial news daily is also helpful.

Observe and give it a try

Observe the market and try making a theoretical investment. Pick a few stocks you are interested and monitor them closely to see how they perform. Analyse how they performed in the past. Determine on a pragmatic amount of money that you may invest, and conclude on a time frame to observe your investment. Think about the level of risk you would be comfortable with if you were using real money. All this experience, without using your cash, is worthwhile in the share market game.

Get into the share market game

Many brokers will say that you can enter the share market with a minimum of $500. Nevertheless, it is a good idea to enter the share market with at least $2,000; it will help avoid brokerage fees eating away your profit. On a side note, you should always remember, only invest the amount of money you are prepared to lose. The share market is a double-edged sword.

Never invest everything in one share

Do not invest all your money in any one stock. The best thing to do is, diversify your portfolio; invest in different stocks. By diversifying your portfolio, you can reduce your overall risk. It also helps increase overall investment return.

Prefer long term investments

The stock market is always volatile–it can go up or go down in an instant. Do not worry if the price of your share drops down; it is imminent. Short-term trading can be a bad idea, especially for those who are just getting into share market game, as the market can be uncertain. You should prefer making long-term investments and determine beforehand on how long you will stay in the market.

Use your head; not your heart

When you are in the share market game, you need to cut all your emotional ties with certain companies. Loving certain companies’ products and services, does not equal a good investment. It is essential to examine how a company’s shares perform in advance of buying those shares.

Use the services of professional stock market advisors

Taking investment tips or Australian share market advice from someone you know, who trade, may not do you any good. Always perform market research by yourself, and if necessary, get in touch with a professional stock market advisor. A professional stock market advisor has considerable experience, knows how the share market works, and can give an excellent Australian share market advice.

Tips on How to Use Covered Calls Australia Successfully

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Writing covered calls in Australia can indeed produce consistent monthly income for investors. A covered call is an option trading strategy where investors write “sell” call options against the shares they already own. Usually, a call option consists 100 shares of a particular stock. In exchange for writing call options, investors receive a premium. The premium, however, comes with an obligation; if the buyer exercises the call option, the investor is obligated to deliver the shares to the buyer.

How to Use Covered CallsFortunately, investors already own the underlying stock, so their potential obligation is very much “covered.” Because the obligation of delivering the shares if the buyer exercises the option is covered, this strategy acquires its name “covered call” writing.

Covered call writing in Australia is a fairly conservative strategy. Nevertheless, there are risks associated with it. With proper ASX options advice, however, covered call writing risks can be minimised or averted. Here are three tips on how to use covered calls Australia successfully.

Keep market volatility in mind

Stocks that exhibit medium implied volatility are the most suitable for the covered call strategy. In case implied volatility is low, the premium that investors get will also be probably low. The premiums will be high if the implied volatility is high, but there is a trade-off.

If the implied volatility is high, the probability of the stock to move considerably in either direction is also high. It could mean that investors have a higher chance of taking a loss if the stock drops significantly, or of having their stock called if the price increases. With covered call strategy, it is to be remembered that if the price rises (and exceeds the strike price), the call buyer can exercise the option and demand the stock.

To be safe, investors should consider the stocks with options that exhibit medium implied volatility. Medium volatility should yield enough premium to make the trade worthy. It also eliminates the big risks that are associated with high-volatility stocks.

Plan with what to do if the stock goes down

Investors normally sell a covered call on a stock on which they are bullish in the long-term. It is really helpful to have a plan in place if the stock goes downward. Nobody likes it when stocks plummet–right? Investors have more choices than they think, however. Many investors assume that writing a call lock them in a position until the call expires. This is not true. Investors have the choice to buy the call and remove their obligation to deliver the stock.

If the stock has fallen since the investor sold the call, he or she may be able to buy the call back; that too at a cost lower than the initial sale price. This way, an investor can make a profit on the option position. Doing this buy-back also removes an investor’s obligation to surrender the stock if exercised. Investors also have the option to dump their long position and prevent further losses in case the stock continues to drop.

Consider buy-writes

If investors are really into covered calls writing, they need to consider an excellent strategy called “buy-write” first; with this strategy, they can buy the stock and write the call option, against that stock, in a single transaction. The strategy of buy-write is not limited to convenience only. One thing this buy-write strategy offers is an instant income, in the form of an option premium. Besides, such options often expire worthless; hence, the investors will get to keep the premium, as well as the ownership of the stock. In the bull market, buy-write strategy can underperform, but in flat and bear markets, the strategy is one of the best strategies for investors.

To conclude, covered calls can be an excellent strategy to generate consistent income. Normally, investors write covered calls on stocks, on which they are long-term bullish. Covered calls are useful on stocks that are stagnant in the short-term. Of course, there are some risks associated with covered calls, but with proper covered calls advice, risks can be minimised.

Ways to Use ASX Options as a Strategic Investment

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Trading ASX options as a strategic investment (investment made with the aim of generating safe, consistent returns), is very important for traders. Options trading in Australia provides traders excellent strategies that help boost their profits, decrease costs and extend trading approach. Even though many investors are reluctant of using ASX options, it is crucial to understand that these financial derivatives are no more or less risky than any other form of trading. ASX options are excellent financial derivatives that, when used safely, can be very beneficial to your portfolio. Another good thing about ASX options that most people do not realise is that they are short-term trading derivatives, and so it requires significantly less technical analysis than ordinary stock trading. Nevertheless, it is necessary to have some technical analysis skills for trading options as it can help predict the market movement and movement’s magnitude.Ways to Use ASX Options as a Strategic Investment

Here is how you can use ASX options as a strategic investment:

Recover some of the cost of your share market investment

If you already own some shares, you can slowly recover the cost of the shares by selling call options against them every month. This strategy is called covered call writing. Covered calls Australia are effective, and over a year, it is possible to write (sell) covered calls several times that you can in the course of time pay off everything you invested in the shares. Because you will already be having enough information about your shares, the technical analysis for covered calls Australia will not be complex.

Buy stock for half price

Buying deep in the money (DITM) options for a short term momentum trading is an excellent way to buy stocks at half the price. If you see possible growth of the stock over the next couple of months, you can rip the benefit from the strong delta of the option and purchase the rights to it at a substantially reduced premium.

Get paid to buy stocks

If you have a certain stock in mind that you would like to own, buy do not want to buy it at a higher market price, then the strategy of selling naked put options may prove to be useful. Every month, you sell put options against a stock, but at a strike price or exercise price that is lower than the price at which the stock is currently trading. In case the price of stock goes up, your put expires worthless, and you retain the money. If the price drops to your set price, you can buy it and wait to bag profit as the stock recoups back up. Once you have bought the stock, you can sell covered calls to further reduce the price you paid for it.

Profit from unstable markets

Do not sit idle in a volatile market. Look at the chances presented in such a market. Options strategies such as buying strangles or straddles, selling credit spreads, dealing in butterflies, etc. can yield excellent profit in a volatile market.

Selling the future

Using the credit spread strategy is an excellent way to make a steady profit of about 10% per month. Identify the market trend, and sell credit spreads every month to build your portfolio.

Options trading in Australia can be risky, but with the right approach or with a good ASX options advice, risks can be minimised and profit can be made. Today, a range of options trading strategies is available through which traders can yield excellent returns in almost any market condition. If you want to gain more insight on different ASX options strategies, including covered calls Australia, butterflies, and others, expert advisors at Total Options can help. Get in touch with them at www.totaloptions.com.au

The Lucrative Options Trading Strategy

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There are different ASX options trading strategies available today, but which one should you choose in order to yield a decent profit? If you search on the internet and go through different investing forums, you will find plenty of options trading opinions that can confuse even the moderate investors. Some investors employ academic approach and analyse profitability and risk from that perspective, while others employ a more adaptable approach. One thing is for sure, however — the main reason why investors prefer options trading is that they want to earn better profits than they can through any other stock trading strategy. With the crazy swings of the Australian Share Market over the past few years, most traders and investors have started to realize the absurdity of simple strategies like “buy and hold”, and have been looking for reliable, profit-generating trading tactics.The Lucrative Options Trading Strategy

Is options trading lucrative?

Some investing forums will give you an impression that options trading in Australia is dangerous and risky. The fact is, any sort of trading is risky, but look at the magnitude of profit that options trading in Australia offers. In contrast to any other investment option, options trading yields exceptional returns. With a very small capital, you have the leverage to control big blocks of share, through which you can reap excellent profits whenever the market moves in the right direction. The disadvantage is that the same leverage also has the capability to erase your portfolio if the options trading strategy you are using does not address certain risk factors. Therefore, the answer to the simple question above is, yes. Trading option in Australia is lucrative, but in some circumstances, it can also be risky.

Is there any options trading strategy that can yield consistent profits?

Novice traders are often introduced to the simple ideas of buying call and put options. While this strategy is easy to understand and put to work, the truth is, in order to make it successful, you need to gain some skills for technical analysis that allow you to predict at least the direction and magnitude of the market swing. This simple strategy indeed provides the greatest potential for a huge profit, but in reality, such potential is not regularly achieved. Therefore, while the simple “buying call and put options” method has an excellent potential for a good profit, it is challenging to attain such potential on a regular basis.

Selling put options

Studies have shown that the most excellent options trading strategy, which can yield excellent profit on a consistent basis, involve not buying call options, but selling put options. Selling put options or selling credit spreads (suitable for those with lower margin limits), had proved to be more lucrative over the long run than any other options trading strategy. While the magnitude of profit is small than other options trading strategies, the consistency of making profit makes it the best strategy. Another excellent advantage of this strategy is that the technical analysis necessities for selling put options or credit spreads is not as tough as that required for other options trading strategies. The risks associated with this strategy are also less. With a solid trading plan, which includes an exit strategy, selling put options can yield more profit with less risk than any other trading strategy.

If you want to venture into ASX options trading, you will need study and understand different strategies and then develop a robust plan that can help yield consistent profit and at the same time minimise your risk. At Total Options, we provide Australian option education that can help you understand how options trading in Australia works. We even provide excellent ASX options advice that can help you yield consistent good returns with minimised risks. In order to know more about Total Options, visit www.totaloptions.com.au

Covered Calls Australia – An Excellent Strategy That Every Investor Can Use

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Every day, transactions of billions of dollars happen on the Australian Securities Exchange (ASX). Some of thCovered Calls Australia – An Excellent Strategy That Every Investor Can Useese transactions are made by big financial institutions while other transactions are made by well-known insurance companies. One of the techniques used by the gurus of Australian share market to generate consistent income is writing (selling) covered calls. Writing covered calls is a simple technique, which is eminent among institutional traders, but a mysterious one to the novice or self-directed investor despite being lucrative and even deemed “easy” by ASX itself. In other words, you do not need to be a share market genius in order to learn and try writing covered call.

Most investors probably invest in share market in order to yield consistent monthly income from their portfolios. Instead of investing in popular mutual funds or purchasing and holding certain stocks hoping for a rise in their value, why not devote some proportion of your account writing covered calls every month? The versatility of covered calls Australia can generate consistent monthly income for any investor with a trading account. In order to generate consistent monthly income with covered calls writing, however, obtaining the proper options trading education is vital.

Here is how covered call options trading in Australia works:

If an investor has 1000 shares of Telstra stock at A$ 5.00 per share and is ready to sell those for a profit, that investor can sell or give away the right to someone to buy their shares at A$ 6.00 per share. In the terms of covered calls Australia, the investor would be selling the right (with obligation excluded) to someone to purchase their Telstra shares at the A$ 6.00 strike price. The income that the investor gets from selling the rights to someone is called premium. In our case, the premium for writing a thirty-day option is A$ 1.00 per share.

Like any other investment strategy, there is a downside to writing covered call options. If Telstra shares should rise to A$ 9.00, in the above case the investor would be obligated to give away or sell their shares at A$ 6.00. If Telstra shares never cross A$ 6.00 until the date when the option expires, the investor is eligible to keep their shares as well as premium income. The key to successful covered calls Australia trade is to know which particular stocks to hold for writing covered calls and which ones to invest in for the long period.

For quite some time now, writing covered calls in Australian share market has been a top technique used by professional investors to generate guaranteed monthly income. You too, no matter if you are a novice, can try writing covered call option in order to create steady monthly income. With covered calls Australia, risk is low, and income is consistent.

To know more about covered calls Australia, contact the vastly experienced options trading experts at Total Options www.totaloptions.com.au. They can give you deep insight on covered calls and can also provide excellent Australian share market advice.

Options Trading – The Best Way to Earn Excellent Returns

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Investing a portion of your salary is a sensible thing to do. While it is tantalizing to spend all your earnings in buying new things, take a rational decision to save money. Everything is unstable in this day and age, and saving some money can prove to be your one of the wisest moves. Once you have gathered a considerable amount of money through savings, you can turn your focus on using that money to earn some healthy returns. Yes, it is possible to earn excellent returns from money you made through saving. How? The safest way is by making careful investment in ASX options trading. Options trading in Australia has a number of benefits.

Options Trading – The Best Way to Earn Excellent ReturnsOne notable benefit of options trading in Australia is that you can invest in it with a small capital. As a matter of fact, most investors favour to invest in ASX options only because of their requirement of small capital, low risk, and good returns. As an investor, you can garner excellent profits by purchasing shares below market price and selling (writing) them above market price.

Another big advantage of ASX options is that unlike other types of assets, they offer excellent flexibility to investors. Whether the share price goes down, up or sideway, with proper ASX options advice, investors can cover their portfolio or book profit.

With ASX options, you can also build and spread out your portfolio. By spreading out or diversifying the portfolio, investors will be able to buy and sell shares, as well as be able to hedge against market uncertainties. Just like any other investment, there are some risks associated with options trading. With a good ASX options advice to create sensible options trading strategies, however, the risks that associate with options can be minimised.

Find an experienced options trading advisor with the help of the internet. Professional advisors, through their various income strategies, can help maximise your profits. They have ample knowledge and understanding about the Australian share market. They can help you solve your issues or answer questions about your investment. Finally, by teaming up with an experienced ASX advisor, you will be able to eliminate the speculation with taking investment decisions.

As for your part, you should absorb yourself in different resources relating to this form of investment as well as strategies such as collars options and covered calls that you can exercise in your favour. Once you are familiarised, confident, and have selected a proper trading strategy, you have to try to keep yourself at the top of the game by staying in sync with the current market developments. Try to invest on your own with the help of useful online resources and literatures. Alternatively, you can opt for Australia option education, which can give you deep insight about securities.

Whether you want to invest in ASX options by first gaining insight on them or simply with the help of an expert ASX options advice, the professionals at Total Options can help. Total Options is a collaboration of vastly experienced ASX advisors. They provide excellent advice on a range of ASX options trading strategies. In addition to professional advice, the professional at Total Options also provide ASX options education that gives investors a valuable knowledge on options trading in Australia.

Visit their website www.totaloptions.com.au to know more about them.

What is The Most Consistent, Profitable Options Trading Strategy?

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Out of various options trading strategies that are available on ASX, how do you decide which one will yield good returns? When you explore various investing forums, you will find numerous different opinions; it only makes thing hard to find out the right trading strategy. Some experts employ a rigid academic approach in order to analyse risk and profitability while others soWhat is The Most Consistent, Profitable Options Trading Strategy?rt to a more flexible approach. One fact, however, remains—the primary reason these investors utilise options is because they want to earn healthy returns which ordinary stock trading strategy cannot yield. With the strange gyration of the Australian stock market in the last few years, many investors have started to understand the ineffectiveness of strategies like “buy and hold”, and have been searching for more conservative, profitable trading strategies.

Is Options Trading in Australia Profitable?

Many investing forums will have you believe that options are highly risky and dangerous. The fact is that for the sheer scale of profit, ASX options trading cannot be beaten. The magnitude of the potential gain offered by ASX options is enormous. For a small amount of investment, you have the ability to control large blocks of stock, and can garner excellent profits from a move in the favourable direction. The downside is that options also have the ability to wreak your portfolio, if you are employing a trading strategy that does not address the risks of the particular strategy. In short, the simple answer to the above question is yes; options trading in Australia can be profitable, but it can be risky as well in some situations.

Is there a consistently profitable strategy for trading options?

Most traders new to options trading are simply introduced to the concepts of buying calls or puts. While these concepts are easy to understand and implement, the fact is that, in order to be successful with options trading, you should have excellent technical analysis skills that allow you to calculate the direction as well as magnitude of any market moves. This options strategy indeed the largest potential for profit, but the fact is that such potential is often not achieved. From one single large loss, it often requires several good trades to recover. Therefore, while the buying calls and puts strategy has the greatest potential for profit, it is difficult to achieve that potential on a frequent or consistent basis.

Selling strategies

As per our experience, the most profitable options strategy involves not buying, but selling options. Selling puts or credit spreads is more profitable over the long term than any other approach. The magnitude of the profit is less than other strategies, but consistency of profit is possible with this strategy. The notable advantage of this strategy is that the analysis requirements for selling credit spreads or selling puts is not as rigid as the requirements for other strategies. The degree of risk is also comparatively lower at every level. With an excellent trading plan, which also includes a nice exit strategy, selling options can be less risky and more profitable than most stock trading strategies.

If you are thinking about options trading in Australia, you will need to understand different strategies and create a sturdy trading plan in order to yield excellent profits with minimised risks. Partner with us to learn how to do this. Follow the link in order to contact us http://totaloptions.com.au/

Important Criteria for Selecting the Best Stocks on Which to Write Covered Calls

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Writing covered call is one of the most popular strategies that many expert traders as well as traders new to options trading use to generate income. The strategy is popular for two reasons:

  1. It is a conservative strategy
  2. It is easy to understand and trade

For those who are unfamiliar with the covered call strategy, it works in the following manner. For every 100 shares of a particular stock that you already own, you can sell someone the right (no obligation) to buy those shares from you at a certain fixed price (strike price) before an expiration date. The amount that you get from writing (selling) the call is called premium.

At the expiration, if the stock ends up above the strike price, you will be obligated to give away your shares at the agreed price. If the stock ends up below the strike price, the option expires as worthless, and you will be able to retain the ownership of your stock, which you can again use to write the covered calls.

While covered call writing is a straightforward option strategy, it does not mean it is easy to make excellent returns consistently. The strategy has two major risks:

-          When the price of the underlying stock takes a big leap, you will miss out on gains above your strike price because the buyer will exercise the option and you will have to sell at a price, which is below market price.

-          When the value of the underlying stock falls substantially, the loss from holding your stock will probably exceed the gain from the premium income.

Because of such risks, it is crucial to select a proper trade plan. Randomly selecting stocks on which to write covered calls or selecting certain stocks simply because they have high premium will probably lead to failure.

Here are two important criteria for selecting the best stocks on which to write covered calls:

Important Criteria for Selecting the Best Stocks on Which to Write Covered CallsSelect stocks with good technical. There is no need for you to become a technical analyst in order to be successful with covered call strategy, but knowing the basics of technical analysis is helpful. If you are going to be making short-term trades, it is essential to have some kind of basic understanding of technical analysis or access to some tools and resources, which can help you to determine the short to intermediate term technical health of a stock. By knowing the technical health of a stock, you can also determine its covered call suitability.

Select stocks with realistic premiums. If you are going to be writing covered calls for income, you will want to pick stocks (technically healthy) with a good amount of premium so that it be worth your while. Good premium does not mean high premium, but realistic premium. Options with very high amount of premium are dangerous ones. They have high volatility and uncertainty. No matter how big returns they yield, these types of stocks are not fit for reliably successful covered call strategies.

Covered calls strategy can be an excellent resource to generate income. However, just because it is easy to understand and to trade does not mean it is easy to execute on a consistent basis. Fortunately, there are various resources available that can help improve your covered call returns; for instance, the experienced advisers at Total Options. Covered calls Australia advisors at Total Options have the skills as well as vast experience that help them give you excellent advices that can improve the performance and returns on your covered calls. Know more about them by visiting their website http://totaloptions.com.au/