Posts Tagged ‘stock options’

Get Ready to Make Money – Open Mind required

Friday, October 5th, 2012

I live by two sayings when it comes to making money

1-Having money is all about having ideas, if you don’t have money you just lack ideas

2-If there is a will there will always be a way

I have had great success in my life thanks to these quotes. You can plan as much as you want, but expect some roadblocks along the way. To get ahead in life you will need to overcome a few challenges on the way.

If you’re still reading, then you are serious about building wealth. So let’s discuss the fun stuff.

Passive income strategies can make you a lot of money if you do it right. There are some keys to doing well and they are pretty straight forward.

1) Do your Homework – Learn before you earn

Most individuals get into investing because they hope to make a quick buck with no effort. There are money-making methods that require very little effort to maintain, but some initial effort is required to get the ball rolling.

Jumping into something without any knowledge whatsoever is a sure way to failure, DON’T DO IT.

2) Don’t pick investment strategies solely based on the potential or promise to make a lot of money.

It is best to pick an investment based on what you like to do. For instance, if ou are an introvert you should avoid investment strategies that require you to be outgoing. If you are more of the think tank type that likes to work behind the scenes, then avoid methods that require an outgoing personality.

Another example, if you are a detail oriented person that likes to see data, then maybe there is an opportunity for you in stock options trading, or real estate investing.

Make a list of your strengths and weaknesses, then choose your money-making path wisely. I used this technique to take stock of my natural abilities and this eventually lead me to options trading on line and Internet marketing. I love the idea of working from home.

3) Be open to unique possibilities

There is nothing to it, but to do it. There are countless ways to make money. There will always be those that will tell you that something cannot be done, don’t listen to them. If there is a will there is a way, find your will and way to make it happen.

I guarantee you that if you ask all the millionaires if someone ever doubted them, they would all say yes.

Want to find out more about making passive income ? Visit Dale Poyser’s site to learn about how to choose from the best passive residual income ideas.

Trading Commodities Vs. Financials

Tuesday, October 18th, 2011

As one of the leading innovators in the options teaching industry, at San Jose Options, Inc. we are constantly looking for new ways to eliminate the effects of volatility so we can achieve higher success rates with our option trades. As part of this ongoing quest, we’ve been doing case studies on Commodity trades and the Financials to evaluate the similarities and differences between these products, specifically as they apply to option spreads. Our studies over the market crash of 2011 have yielded some eye-opening results.

Their studies have found a marked increase in the IV which follows the RUT (the RVX) compared to the IV on Corn for the month they traded. The spread using RUT yielded a draw-down of 3% and the same trading strategy on Corn earned a profit of 5%. They explain this difference by referring to the behavior of price direction and the movement of implied volatility during this period.

The RVX, which tracks the IV of the RUT, increase from 21% to 55% during the study. This represents an increase in IV of about 160%. The IV of Corn during this period rose from 25% to 34% for a change of 36%. Another aspect of the study included the price movements. Over this period of time the RUT dropped from 858 to 650 for a total of 208 points. This equates to a 24% drop in price. Corn on the other hand, rose from 616 to 689 during this period for a total move of 12%.

So, while the RUT dropped 24% and its IV rose 160%, Corn rose 12% and its IV rose 35% during the same volatile period of time. As unexpected, surprising and counter-intuitive as this seems, the IV in the RUT moved much faster in relation to the price drop than the rate IV changed compared to the price hike in Corn.

So even though Commodities may have a reputation for being so volatile, the Financials may give the illusion that they are more stable, but when it comes to option trading, the options on Financials may be much more volatile than options on Commodities.

And don’t immediately write this off as an isolated anomaly. San Jose Options, Inc. has also been doing studies on Soy Beans and Wheat and finding similar price to IV behaviors there as well.

We have to conclude that using options on the RUT over the recent crash would have been more volatile and difficult to manage than the same trade on Corn, since the IV changes are a lot more prominent in the study of the RUT. Surprised? In actual fact, the Corn trade made money while the RUT trade lost money. Corn moved only half as much as the RUT over SJO’s testing period. Significantly, the IV on Corn only moved one-fourth as much as the RVX. The Financial trade was influenced twice as heavily by the rise in IV as the Corn trade was.

As we stated when we started out above, we continually look for ways to eliminate the effects of volatility in order to achieve a higher success rate with our option trades. Our study indicates that trading Corn and other Commodities can be less volatile than trading the Financials such as the RUT, SPX and NDX! These Commodity trades might even be consistently less volatile… Imagine that!

San Jose Options, Inc. will conduct similar studies on this topic to gather more evidence of these striking trends. Good luck with your trading until then. Hopefully, you’ve learned something from this article that’s given you a few ideas to think about…

Trade Options, not your livelihood. Learn safer ways to Trade Options on Futures with San Jose Options Mentoring.