Stock Tips Blog
Stock market tips for covered calls and more!
Best Online Stock Trading
This site lists the best online stock trading platforms out there. There are many strategies to trading the stock market. One of the most conservative and my favorite strategy for online stock trading is covered calls. With covered calls you need some capital to invest with, but you should see consistent returns on your trade. You can see anywhere from 3-8% with the stocks I list for you on your covered call trade. This can generate roughly 30% returns on your trading for the year. There's no guarantee with the stock market and I'm not an adviser or broker, but my goal here is to provide you with information that can provide value to your portfolio. My method is simple and easy to follow, each month I send out a newsletter with stocks that could provide good returns on writing covered calls. I also send other newsletters for big movers and what's hot. I’ll provide more details on how to write covered calls in my writing covered call section of this website. It will also go over things like “in the money”, “at the money”, and “out of the money” terms that’s important to trading options.
Timing the market is something that I feel is next to impossible. There are two primary ways to time the market or pick stocks, they are fundamental analysis and technical analysis. The fundamental analysis is where you do research on a company, find out the P/E ratios, know about previous earning reports, analyze the company for investing. This is more for long term investing, and people can make money by doing it. It’s just not something that I’ll go over; there are plenty of books out there for fundamental analysis if that’s something you are interested in. Fundamental analysis can work with covered calls, if you really like a stock for its fundamentals, an extra way to make cash flow is to play further out of the money calls. The reason for playing further out of the money is if you like the stock and want to keep it, you don’t want the stock to be called away. Further out of the money means the option strike price is further away from the current price. You’ll still make money if the stock does get called away.
Technical analysis is a fancy, technical way of guessing which way a stock will move based off indicators. The indicators can be MACD lines, candle stick patterns, Bollinger bands, support and resistance lines, trend lines, moving averages, and a mess of other indicators. There are rules and guides to follow for different indicators, and ways to tweak them for your trade. But it really all comes down to making an educated guess, and that’s not something I’m willing to put real money into. The covered call strategy works because it doesn’t go off indicators. There are a few things to pay attention to, like when there are big news announcements for a company, like earning reports, or a new product release. Knowing when those come out is important, because it could affect how much the stock moves. As long as there’s no major news coming out for a stock, trading covered calls is a good way to go.
Finding the best online stock broker for you is important for trading. You’ll likely be with the broker you choose for a while, so picking the best one does make a difference. Most only brokers are the same when it comes to making trades. They all must have the basics covered. Some charge extra for making orders on the phone, some have higher commissions, some advertise cheap commissions. While cheap commissions can help keep you profits, it doesn’t always mean that’s the best choice. Some areas to look for are what other value does a broker bring? Do they provide stock information, training, charts, virtual trading, and advanced trading like trailing stops? How well is their support if I have questions? Most brokers will help you once you open an account and most accounts are free to open. If I had to narrow down the list for you I would go with one of the following: OptionsXpress, E-Trade, Trade King, Option House or TD Ameritrade.
One of the best online stock trading brokers in my opinion is OptionsXpress. They provide tons of research tools and have excellent customer service. They even have a virtual trading platform so you can test out your trading with fake money before you trade with real money. It's always a good idea to practice a strategy first before going live with it. The virtual trading platform is almost like the real one used by OptionsXpress, there are a few differences and tools that the real one has that's different, but for covered calls it's pretty much the same. You can always contact OptionsXpress if you are unsure about how to do a trade too, even for the virtual trader.
Best Online Stock Trading
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