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Ten Top Tips To Trade Stock Options Successfully - #2
This article teaches what information you need in order to trade stock options and how to profit through stock options investing. This is key #2 in a series of 10 keys to successful stock options trading.
Welcome to the second article on how to trade stock options successfully. This week we will cover the next part, whcich is where to obtain good information, an essential part of your success as a trader.
Most people have heard the expression “garbage in, garbage out”. Well that phrase applies to options trading as well. You will only successfully trade options if you have good market and stock information. One of the most powerful reasons whay stock options trading is so easy these days is because there is a wealth of great information that is easy to find and free of charge. The internet has made this information easily accessible to any trader whether they are in the office, at home or at the local coffee shop. The trouble is interpreting and discerning the useful information.
I have compiled a list of sites that I visit daily along with an explanation of just some of the information you can find on them.
www.finance.yahoo.com
Yahoo! Finance is a great source for all financial news. Each morning, before the market opens, I check the In Play® report. This report tells you all of the financial and company news that has occurred during the night and before the market opens. This is an excellent place to find out what stocks are on the move and what the market is likely to do at the open. Another good report is the Market Overview which is updated every half hour and provides data on the major indices as well as commentary throughout the day.
When you enter the name of a stock or ticker symbol, Yahoo! Finance has an excellent company overview, with current news and charts, a full profile, key statistics, financial reports and analyst coverage.
Additionally there is a splits calendar that details the stock splits that are currently announced and an economic calendar that not only details upcoming economic announcements but ranks them according to their importance or impact they have on the stock market.
www.msnmoney.com
Again, this website is a good source for all investment news. MSN Money has an excellent earnings page that shows you estimates, past performance, earnings trends and earnings growth rates. It also has a very easy to use Research Wizard that explains and identifies fundamental analysis of individual companies. The MSN StockScouter report rates individual stocks according to a proprietary method of analyzing a stock’s potential risk and return.
www.rttnews.com
This website has financial news from around the globe. I particularly like the breaking news feature that can be downloaded and placed on your desktop. A desk alert then pops up with any breaking news as it happens. It can also be customized so that only the information you want gets through.
www.tradingday.com
This is a very rudimentary website that has excellent links to such information as stock gainers and losers, most actively traded stocks, market statistics, after hours trades and analyst and broker rankings. All of which is very useful information when trading short term.
www.prophet.net
Like most sites this has a paid membership service but there is a lot of great information if you sign up for a free basic membership. The industry rankings are a good indication of where institutional investors are putting their money, and as they control the markets it is a good idea to find out which way their money is moving. The historical trends show the change in ranking over a certain time period, another good indication of which way money is flowing. Prophet has two very robust screeners for the more technically minded, the first is called “Prophet Signals” and the second is “Prophet Scan”. I encourage you to explore them both.
As I mentioned in the beginning of this article good information is key to good trading, remember though, you must learn how to use this information correctly in order for it to benefit you. Spend some time familiarizing yourself with these websites, make sure you know what all of the terms mean and how to use the indicators and if you find any other good websites out there please let me know! If I may paraphrase Benjamin Franklin I will finish by saying “The best return anyone ever gets on their money is when they invest in knowledge.Next week we will discuss the 3rd key to successful options trading.
US Government required disclaimer: Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of the Characteristics and Risks of Standardized Options. Copies of this document may be obtained from your broker, from any exchange on which options are traded or by contacting The Options Clearing Corporation, One North Wacker Dr., Suite 500 Chicago, IL 60606 (1-800-678-4667).