Profitable Options Trading
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PROFITABLE OPTIONS TRADING BY WWW.O PTION S -TR AD ING-EDUC ATION.COM
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http://www.Options-Trading-Education.com - Profitable Options Trading - After a year of dashed expectations and chaotic markets what is the best route to profitable options trading for 2012? Euro options trading was attractive, and profitable, for many last year as the seemingly eternal European debt dilemma drove the Euro downward. In the US options market calls generally worked in the first half of the year as stocks went up and puts generally worked in the second half as stocks fell. Where are stocks, commodities, and foreign exchange going next year? Which arena will offer the most profitable options trading? In general volatility goes with profitable options trading. The obvious part, however, is that the options trader needs to be able to accurately anticipate the directions or individual stocks or stock indices. He needs to have a clear idea of what drives wheat, corn, oil, or gold prices. And, to derive the most profit from trading options the trader needs to be able to assess short term changes in market sentiment. With these thoughts in mind we look at foreign currency, commodity trading, and the state of China in the year to come.The Much Anticipated Demise of the EuroIn an attempt to bring fiscal order to the European Union the members of the EU amended their treaty. One of the things they did was give more power to the European Central Bank. The bank also has a new president, Mario Draghi. Mr. Draghi not only went to MIT, like US Fed chairman Bernanke, but Mr. Draghi may well be following the prescriptions of the Fed chairman as well. Bernanke is a recognized expert on the causes of the Great Depression. His recipe for avoiding another depression is commonly referred to as the Bernanke doctrine. A key facet of this doctrine is that printing money and buying the country’s own debt, with printed money, will keep credit flowing and avoid another Great Depression. Soon after Draghi took office he issued loans to banks across Europe in excess of $600 Billion when measured in US dollars. The point is to keep banks solvent and provide money for business to function. The point is also to bail out the faltering economies of the southern tier of Europe. With the printing pressing going at full speed it may well be the profitable options trading in Forex may well be to buy puts on the Euro keep counting ones profits.Gold, Oil, and Chinese Real EstateTrading gold options has had the potential for profit for the last decade as the price of the shiny stuff has both risen and fallen as the price has moved upward for a decade. Gold bugs are still predicting $3,000 an ounce but many contend that the recession, at least in the US, is nearly over and that stocks will take off. If that is the case take a look at what happened to gold at the start of 1980’s. Oil should go up if the Euro and dollar inflate but that assumes an economic recovery. A new recession in Europe, the world’s second largest economy could put a damper on oil prices.
Transcript of Profitable Options Trading
PROFIT
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AFTER A YEAR OF DASHED EXPECTATIONS AND CHAOTIC MARKETS WHAT IS THE BEST ROUTE TO PROFITABLE OPTIONS TRADING FOR 2012?
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
EURO OPTIONS TRADING WAS ATTRACTIVE, AND PROFITABLE, FOR MANY LAST YEAR AS THE SEEMINGLY ETERNAL EUROPEAN DEBT DILEMMA DROVE THE EURO DOWNWARD.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
IN THE US OPTIONS MARKET CALLS GENERALLY WORKED IN THE FIRST HALF OF THE YEAR AS STOCKS WENT UP AND PUTS GENERALLY WORKED IN THE SECOND HALF AS STOCKS FELL.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
WHERE ARE STOCKS, COMMODITIES, AND FOREIGN EXCHANGE GOING NEXT YEAR?
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
WHICH ARENA WILL OFFER THE MOST PROFITABLE OPTIONS TRADING?
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
IN GENERAL VOLATILITY GOES WITH PROFITABLE OPTIONS TRADING.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
THE OBVIOUS PART, HOWEVER, IS THAT THE OPTIONS TRADER NEEDS TO BE ABLE TO ACCURATELY ANTICIPATE THE DIRECTIONS OR INDIVIDUAL STOCKS OR STOCK INDICES.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
HE NEEDS TO HAVE A CLEAR IDEA OF WHAT DRIVES WHEAT, CORN, OIL, OR GOLD PRICES.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
AND, TO DERIVE THE MOST PROFIT FROM TRADING OPTIONS THE TRADER NEEDS TO BE ABLE TO ASSESS SHORT TERM CHANGES IN MARKET SENTIMENT.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
WITH THESE THOUGHTS IN MIND WE LOOK AT FOREIGN CURRENCY, COMMODITY TRADING, AND THE STATE OF CHINA IN THE YEAR TO COME.
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THE MUCH ANTICIPATEDDEMISE OF THE EURO
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IN AN ATTEMPT TO BRING FISCAL ORDER TO THE EUROPEAN UNION THE MEMBERS OF THE EU AMENDED THEIR TREATY.
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ONE OF THE THINGS THEY DID WAS GIVE MORE POWER TO THE EUROPEAN CENTRAL BANK.
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THE BANK ALSO HAS A NEW PRESIDENT, MARIO DRAGHI.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
MR. DRAGHI NOT ONLY WENT TO MIT, LIKE US FED CHAIRMAN BERNANKE, BUT MR. DRAGHI MAY WELL BE FOLLOWING THE PRESCRIPTIONS OF THE FED CHAIRMAN AS WELL.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
BERNANKE IS A RECOGNIZED EXPERT ON THE CAUSES OF THE GREAT DEPRESSION.
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HIS RECIPE FOR AVOIDING ANOTHER DEPRESSION IS COMMONLY REFERRED TO AS THE BERNANKE DOCTRINE.
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A KEY FACET OF THIS DOCTRINE IS THAT PRINTING MONEY AND BUYING THE COUNTRY’S OWN DEBT, WITH PRINTED MONEY, WILL KEEP CREDIT FLOWING AND AVOID ANOTHER GREAT DEPRESSION.
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SOON AFTER DRAGHI TOOK OFFICE HE ISSUED LOANS TO BANKS ACROSS EUROPE IN EXCESS OF $600 BILLION WHEN MEASURED IN US DOLLARS.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
THE POINT IS TO KEEP BANKS SOLVENT AND PROVIDE MONEY FOR BUSINESS TO FUNCTION.
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THE POINT IS ALSO TO BAIL OUT THE FALTERING ECONOMIES OF THE SOUTHERN TIER OF EUROPE.
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WITH THE PRINTING PRESSING GOING AT FULL SPEED IT MAY WELL BE THE PROFITABLE OPTIONS TRADING IN FOREX MAY WELL BE TO BUY PUTS ON THE EURO KEEP COUNTING ONES PROFITS.
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GOLD, OIL, AND CHINESE REAL ESTATE
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TRADING GOLD OPTIONS HAS HAD THE POTENTIAL FOR PROFIT FOR THE LAST DECADE AS THE PRICE OF THE SHINY STUFF HAS BOTH RISEN AND FALLEN AS THE PRICE HAS MOVED UPWARD FOR A DECADE.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
GOLD BUGS ARE STILL PREDICTING $3,000 AN OUNCE BUT MANY CONTEND THAT THE RECESSION, AT LEAST IN THE US, IS NEARLY OVER AND THAT STOCKS WILL TAKE OFF.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
IF THAT IS THE CASE TAKE A LOOK AT WHAT HAPPENED TO GOLD AT THE START OF 1980’S.
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OIL SHOULD GO UP IF THE EURO AND DOLLAR INFLATE BUT THAT ASSUMES AN ECONOMIC RECOVERY.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
A NEW RECESSION IN EUROPE, THE WORLD’S SECOND LARGEST ECONOMY COULD PUT A DAMPER ON OIL PRICES BUT PROFITABLE OPTIONS TRADING COULD RESULT FROM SUCCESSFULLY READING THE UPS AND DOWNS OF OIL PRICES.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
A WILD CARD THAT MANY DO NOT SEEM TO SEE IS THE STATE OF CHINA, ESPECIALLY ITS REAL ESTATE MARKET.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
REMEMBER IN THE LATE 1980’S WHEN JAPAN, INC. WAS ABOUT TO TAKE OVER THE WORLD.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
WHEN THINGS WENT TO HECK IN A HAND BASKET OVER THERE IT TURNED OUT THAT THERE WERE A LOT OF BACK ROOM, HANDSHAKE, GOOD OLD BOY LOANS THAT SUPPORTED THE SYSTEM.
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CHINA APPARENTLY HAS THE SAME SITUATION.
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THE COUNTRY IS SOON TO HAVE HALF OF THE SKYSCRAPERS IN THE WORLD.
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BUT, WHEN THERE IS NO ONE TO FILL THEM PROFITABLE OPTIONS TRADING ON CHINESE STOCKS COULD WELL BE ALL PUTS.
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AND, AS USUAL USE THIS DISCOURSE AS MEANS OF STIMULATING THOUGHT AND DO YOUR OWN RESEARCH BEFORE TRADING OPTIONS ON ANYTHING.
W W W . O P T I O N S - T R A D I N G - E D U C A T I O N . C O M
FOR MORE INSIGHTS AND USEFUL INFORMATION REGARDING OPTIONS AND OPTIONS TRADING, VISIT WWW.OPTIONS-TRADING-EDUCATION.COM.
