Stock Options For Beginners

I placed my first options trade over 17 years ago.  It was a commodity futures trade on the price of corn — thousands of bushels of corn.  Analyzing my charts indicated the price of corn was going down so I bought put options.

Indeed, the price of corn did drop shortly after I put on my trade, making me a quick and handsome profit of 300% within 6 weeks.  I was hooked on options from that day forward and never looked back.

Later, as a Financial Consultant and Stockbroker licensed with the New York Stock Exchange, I applied my commodities options experience and training to stock options, helping and advising clients from my office in Coral Gables, Florida.  And I traded stock options for myself as well, as I continue to do today.

You may gather from my first experience and fast 300% that understanding how to trade options can yield many benefits to investors.  For example …

    Stock options can give you leverage on your investment dollar, allowing you to invest less, often half or less, to control the same number of shares of stock.

    Stock options can be quite profitable.  For example, where 8% might be considered a good average annual stock return, stock options can give you returns from 50% to 500%.

    Stock options are even useful to provide insurance against a big loss with a stock holding, and are used for this not infrequently.

    And sometimes even when your stock option trade doesn’t win, you still make money.  I’m happy to lose that way any time, aren’t you?

So you have much to gain by learning how to trade stock options.  And this post is one in a continuing series I will be making to help put you on that good path.

Finally, just a note that in some examples in the beginning of the series of posts, I don’t describe all of the absolute nitty gritty details of stock options right away.

I do this on purpose.  It has been my experience reading numerous books and publications on complex topics like options that authors often try to tell too much, too precisely, all at once.  In doing so they totally confuse the reader before they have a chance to even grasp the most basic concepts.

So I hold back in the beginning and don’t tell you everything all at once.  We refine those points in later posts when the basics are firmly in place.  And there will be a follow on series of posts and book entitled More Stock Options For Beginners.

So that’s my half-hearted writer’s apology.  If someone starts complicating options for you and pointing these things out, just smile and say, “Hey, we know that – we’re just getting the basic concepts down before we get into the nuances.”

With that said, you’ll want to stay tuned to this web site, I believe.  I think you’ll find trading stock options, and learning about them rather exhilarating.  Because when you have put an options trade on, that is to say you have money on the table, it can be thrilling and  you are most definitely in the game.

To your health and prosperity,


P.S. To get a short, quick taste of what a profitable stock options trade feels like, click here for Stock Options And A Happy Trading Story

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