My Options Playbook


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	------------------------------------------------------- My Options Playbook ------------------------------------------------------- Speculation with Calls & Puts Vertical Spreads Price Straddles Investment Strategy Whentobuy.com provides educational material on investing in range bound (also known as channeling, rolling, consolidating) stocks. Range bound stocks are stocks that are neither trending up nor trending down. They are moving sideways in a pattern that shows a definite low (support) and high (resistance) for a specific period of time. There are many different investment strategies that are available. Range bound stocks is only one investment strategy. All of the option plays presented here are specifically described for this range bound strategy. Our playbook provides information detailing different order types and the terms that may be used when using the range bound investing strategy. Information for the novice or experienced trader will be found inside. Building on the two universal attributes presented for stock plays we add a couple of more attributes for options. They are: Always compute your potential risk, reward and breakeven dollar amount for every trade. Always understand how to place orders to buy and how to get out of your trade. This cannot be stressed enough for option spread orders. Always evaluate an option trade using the underlying stock price. Once the option transaction has been placed monitor the underlying stock price along with the option price. Make decisions to exit the trade based upon the stock price. Always use a Stop Loss order on all trades and if your broker supports trailing stop loss orders use them. There are three different methods that may be used for taking profits. The first method uses a Stop Loss order to follow the upward or downward price movement. Move the Stop Loss order to trail the price movement which when the breakeven point for the trade is reached the stop loss converts to a lock in on the profit. Second, keep a stop loss, but place a Sell Limit order at 80% of the maximum profit target. Finally, when you are happy with the profit made take it. As with all trading methodologies there is a different risk, reward, and breakeven point for each method. It is up to you to decide whether to be conservative or aggressive! Most brokers do not have good portfolio management tools for option spreads. We have developed a spreadsheet for each of the different spread plays used on our site. Whentobuy.com and this newsletter are provided for educational purposes only. No statement in the documents should be construed as a recommendation to buy or sell a security or to provide investment advice. It is possible at this or some subsequent time, the editors or staff of whentobuy.com may own, buy or sell securities discussed. All investors should consult a qualified professional before trading in any security. Before trading stocks or options you should understand the risks. In addition, anytime a stock or option is purchased or sold, transaction costs including brokerage fees are at risk. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy and completeness. Back \| Vertical Spreads \| Speculation Calls & Puts \| Price Straddle \| \| Bonus Research \| Weekly Option Plays \| Research Performance \| My Options Playbook \| \| Weekly Research \| My Playbook \| \| Order Now \| Return Home \| Home Business \| Digital Economy \| Sign In \| Disclaimer \| Training Center \| FAQ \| What's New \| Contact Us \|