Alternative Energy Stocks presents - Online Stock Brokerage - 3 Keys to Finding the Best Online Broker For You
Here on Alternative Energy Stocks we are pleased to present you with articles from our guest writers on a wide variety of alternative energy topics. We hope you enjoy this one:
Online Stock Brokerage - 3 Keys to Finding the Best Online Broker For You
By Mike Singh
As the hammered stock markets slowly recover, more people are starting to dip their toes back in to test the investing waters. One problem that still persists these days in the world of online investing is picking a brokerage. There are so many options to choose from. How do you separate the good from the bad? Through this article we’ll explore the key points to bear in mind before you pick your online brokerage.
1) Trading fees: There is no one-size-fits-all approach here. You will need to figure out your investing/trading style. If you are an active trader or place a lot of buy/sell orders every month, you would probably seek a low-cost brokerage or one that gives you volume discounts. If buy-and-hold is your style, then you are ok with the slightly higher transaction costs if the other bases are covered.
2) Stock Research: How do you do your research right now? Do you use publicly available information and crunch the numbers or do you subscribe to stock advisory services already? If you do, then you might not value the stock research availble through your brokerage. Pick a brokerage that satisfies the other criteria.
3) Phone support: Even if you have 24-7 access to broadband dont overlook this feature. Do not go with a brokerage that doesnt provide toll-free access to professionals who can answer questions or help you with your account over the phone. There are various nuances and trading guidelines that are enforced on all trades and these are best explained by the experts rather than spending hours googling all the information.
We said 3 keys, but we’ll throw in another one as a bonus. As you gain more experience in investing, you might want to get approved for margin or decide to add bonds, options and futures to your portfolio. Pick a brokerage that provides you with opportunity for growth in these areas. It is a lot easier to manage your trading or investing activities in one account than be spread across multiple accounts.
Still have more questions than answers? Visit http://www.stock-trading-made-ez.com/ for information on buying penny stocks online.
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Alternative Energy Stocks presents - Selling Covered Calls - When Should Investors Write Covered Calls
Here on Alternative Energy Stocks we are pleased to present you with articles from our guest writers on a wide variety of alternative energy topics. We hope you enjoy this one:
Selling Covered Calls - When Should Investors Write Covered Calls
By Mike Singh
As you probably already know, a call option gives the owner the right, but not the obligation, to buy the stock at the strike price by a fixed date. When the price of the stock goes up the call increases in value. So, you buy calls when you are expecting the underlying stock price to appreciate.
One strategy that is used by traders is to sell or write call options. When the trader owns the underlying stock, this is referred to as a ‘covered call’. The buyer of the call option pays a premium to have the right to purchase the stock at the strike price at a fixed date.
So what are the advantages of this strategy? There are three main ones:
1) Cash Flow
A lot of investors buy stock with the sole purpose of writing covered calls since this can be an income strategy. Its a less risky strategy which can provide steady income and is approved for use in many retirement portfolios also.
One way of employing covered calls is to buy stock of larger companies that have maintained pretty steady prices over large periods of time and whose prices arent expected to soar anytime soon. Once you own the stock, you write a covered call for a price modestly higher than the current price. Lets assume one of two scenarios play out - (a) The stock appreciates significantly and before the expiration of the option you get a nice dividend. Not only do you get a nice gain on your stock locked in but you also get to keep the dividend (b) The stock depreciates and is worth less than the strike price close to expiration. You get to keep the call premium and the stock at the same time. At this point you can issue a covered call on the same stock again.
2) Hedging
There are times when you will own stocks of good companies in your portfolio long-term. But, if you think that the stock might decline over the next few months or a year and you are not willing to sell just yet, you can hedge your long position with a covered call. You will get to keep the option premium while you see how your decision pans out. This strategy works best when there is little downside risk or upside potential in the near term and you want to get some income while you wait for the stock to appreciate.
3) To Get a Better Selling Price
There are times you are just ready to sell a stock because its trading near its fair value. So, you could sell a covered call at a price slightly higher than the current price to increase your overall return from the sale. The neat part about this is that you get extra cash via the option premium and from the higher sell price. The one thing you need to bear in mind when using covered calls with this objective is to be willing to settle for the selling price you decide on.
Now that you have learned the basics of how to trade options, are you ready for more advanced options trading strategies? Visit http://www.e-options.org/ to take your options trading knowledge to the next level.
Article Source: http://EzineArticles.com/?expert=Mike_Singh
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