Using The Stock Market To Make Money As Income

by Jules_Dawson


Creating wealth hinges on Three ingredients:

1) INCOME

2) CAPITAL GROWTH

3) INSURANCE

And really in that order too. You need an income initially to be able to invest for capital growth.

Now we all know that capital growth is generally achieved from real estate and the stock market, but have you considered the stock market as a means for earning money as income?

Many people are deterred from the stock market (especially lately) because of what they see as too many associated risks.

But what if there was a way that you could make money on shares whether the market was going up, or going down, and at a fraction of the cost of actually buying shares?

Well there is!

WITH STOCK OPTIONS

Put simply, a stock option is a contract that relates to a particular stock, and gives you the right to buy or sell that stock at a set price, within a certain period of time, if you choose to do so.

In other words, stock options give you control over shares without actually buying the shares in the first place.

Now if you are staring at this vacantly, thinking What did he say? I'm going to keep this explanation as simple as I can.

Unlike many experienced traders who baffle the beginner with stock market speak, my approach is far more simple than most because trading stock options has given me an enviable quality of life and...

I BELIEVE ANYBODY CAN DO THIS WITH THE RIGHT EDUCATION

HOW DO STOCK OPTIONS WORK?

There are 2 types of stock options:

CALL OPTIONS give you the right buy shares. The value of a Call Option increases when the share price increases.

PUT OPTIONS give you the right to sell shares. The value of a Put Option increases when the share price goes down!

If you were Bullish (that is you think the share price will go up) you would buy Call Options.

As the option value increases with the stock price increase, you would sell the option to another trader for a profit.

If you were Bearish (that is you think the share price will go down) you would buy Put Options.

As the option value increases with the fall in stock price, you would sell the option to another trader for a profit.

Of course you could also profit from buying the stock itself to then sell after the price increases, but there are several things you should consider...

1) You need a much larger amount of money to purchase the stock, than the option.

For example, an XYZ share might cost you $ 15.00 to buy, whereas $ 1.50 might buy you an XYZ option that would give you control over that stock.

2) If the stock price happened to fall you would be facing a potential loss whereas a put option's value would increase with the fall in price.

3) The brokerage costs can be significantly higher. Larger amounts of trading sums tend to incur a % of the transaction total rather than a set fee.

4) Your level of risk. Using much larger sums of money to purchase stocks exposes you to potential higher losses than purchasing options.

In the previous example, had you have bought the share outright, your potential loss would be $ 15.00, as opposed to $ 1.50 had you have bought the stock option.


For more details about Pro system >>CLICK HERE!!!