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OPTION TRADING BASIC

Wednesday, July 22, 2009 | Labels: | |

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Option is investment instrument. Option is instrument, for which most of investor are frightened. Most of investor even though not interested to know some basic also. Such horrible feed when they hear about option. Most of keep in mind is Option is gambling. I am agree with them. Option will be prove gambling if you opt OPTION without any knowledge. If you choose it on some one say you, then it's purely gambling. No matter which investment instrument, if you don't use your head then it is gambling. It may hurt your hard earned money.


Option trading commits you to paying a premium in return for a right to buy or sell a specified amount of shares within specific time period. Returns of Option is lucrative, even though if you commit 9 trade out of 10 in lose. You 1 trade in out of 10 will cover all lose and give you ample of money to trade next trade also.

My suggestion is that learn some basic about OPTION.
Do paper trading for first some months.
Use option as INSURANCE for your portfolio.

There is some ebook available on Valuation for Option. Black-Schole's Model is one of the best to know Option valuation.
You will tonnes of online document on option on web. Just need is give time to read.

Hope this new way is hopeful in volatile market. If any queries ask in comment.

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