Archive for Investment Infos

11.27.08

What the Child Trust Fund Can Do for Your Child, where to Invest the 250 Pounds

Posted in Economy + Finance, Investment Infos at 8:31 am by admin

Are you aware of the Child Trust Fund and its benefits? remarkably few appear to know about the fact that all newborn children are given a free £250 voucher from the government to place in a Child Trust Fund. The voucher can be invested in any one of three types of CTF account, Stakeholder - a shares-based account thatswaps into cash, a savings account or a shares account. It is a great opportunity to invest for the future needs of a youngster

Scottish Friendly is a licensed provider of the Child Trust Fund The Government is eager for the public at large to have access to Stakeholder accounts and this is the sort of account that we provide. This means that:

Investments are sent into Scottish Friendly’s Managed Growth Fund, which seeks to provide good growth potential

An investment is made partly in shares to make the most of potentially higher returns over 18 years,compared to a cash deposit account (although the value of shares can
fall as well as go up whereas capital would be protected in a deposit account)

It is available with a low ‘Stakeholder’ funds charge of only 1.5 percent perannum

At age 18 the child will get a lump sum, wholly free of Capital Gains and Income Tax under prevailing legislation

It is affordable - extra payments can be placed in the account from only £10

One of the highlights of the Child Trust Fund is that anyone - parents, grandparents, aunts and uncles, friends - may give to the Fund to an uppermost limit of £1,200 per year to help augment the child’s Fund (once added, this money is not able to be withdrawn).

All this means our Stakeholder account provides a good balance between potentially high returns and a reduced level of risk. There is also the additional assurance that our account is in accordance with with the Government’s stakeholder criteria. Nonetheless this doesn’t mean that returns are assured or that Stakeholder accounts are suitable for everyone. Bear in mind that the value of shares in the Managed Growth Fund (where your Child Trust Fund money is placed) can go down as well as increase and is not guaranteed.

Only children whose birthday is on or after 1st September 2002 are qualified to open a Child Trust Fund. If you have older kids born before the 1st of September 2002 who are not qualified you could consider investing for them with a Child Bond - it’s a tax-free savings plan intended for long-term growth.

It is evident that saving for your daughter is a sound means of preparing for the world to come.

06.28.08

Hedge Fund Investing Guide 101

Posted in Investment Infos at 11:31 am by admin

Hedge funds have become a new craze among the investors who are looking for higher net returns and to diversify their investment portfolio. However, before investing one should first have a basic idea of what hedge funds are all about. A hedge fund is characteristically a privately organized joint investment fund, predominantly invested in public traded securities. It is a pool of invested capital, used mainly by wealthy or financially experienced individuals and institutions. Usually, law to just 50 to 100 investors per fund restricts hedge funds. Thus, most hedge funds set very high standards for an individual to be a qualified purchaser.

Most often, an investor with a net worth of above one million dollars and an annual income exceeding two hundred and fifty thousand dollars is only considered as a qualified customer. Hedge funds are very similar to mutual funds. The difference between the two is of strategies they use. Hedge funds use a set of strategies other than investing long in bonds, equity, mutual funds and money markets. Thus, its strategies can generate positive returns irrespective of the rise and fall in the equity and bond markets.

One way to invest in hedge funds is to invest in a company just before a major merger, as shares go up significantly once the merger occurs. This technique is called ‘Risk Arbitrage’. However one should have a prior knowledge of the merger before buying large amounts of shares in a company, as it is a very high-risk investment strategy since some mergers may not occur at all. Another technique, which one may adopt while investing in hedge funds, is ‘Leverage’. This means using borrowed capital in to own capital for investment. ‘Selling Short’ is also a popular strategy where one invests in apparently undervalued securities, trading commodities and FX contracts, and takes advantage of the difference between current market price and the highest purchase price in events such as mergers.

Even though most hedge funds promise higher net returns, they are accompanied by some limitations. For instance, in case of many hedge funds, there are certain restrictions on one’s right to redeem his shares. Often, there is a lock-in period that can extend to over a year. During this period one cannot redeem his shares. Hence, one should reconsider his options and take into consideration a long-term perspective before investing in hedge funds. Moreover, hedge funds also have a higher failure rate than traditional funds. Many of them fail by the second or third year of operation. It has been estimated that about 5.7% of the existing 8500 hedge funds closed in 2005. Also, because of their non-regulation there are no official hedge funds statistics. Besides, hedge funds are more suited for large businesses because they have a price tag.

However, hedge fund is a very helpful tool for the diversification of one’s investment portfolio. It reduces the overall portfolio risk and volatility, as it is not related with the broad stock market indices. Thus it is a smart choice for those who are willing to take the risk.

Mansi Aggarwal recommends you visit Hedge fund investing for more information.

06.20.08

Property Index Online - Your Universal Real Estate Forum

Posted in Investment Infos, Universe Of Real Estate at 11:48 pm by admin

Property Index have a range of properties for sale in Spain, from villas to apartments.

Despite the fact that the Property Index is only a new kid on the block syndicate, they were founded only in March 2007, they have become experts very quickly. In point of fact a unbelievably cool syndicate focused on offering guidance to any individual who is intending to rent real estate just about anywhere. They assure they will lend you a hand to light on just what’s desired quick and, of course, unproblematically. Property is across the globe presently, one of the most called for areas being properties available for sale in Spain. It’s easy as one-two-three to pinpoint all the phenomenal real estate on the market in Spain, the argument for hunting for realty here is a combination of the houses and apartments for sale and the sensational option to live surrounded by such a bubbly, passionate and dynamic populace.

This is one of the truly sought after countries presently, and in view of the overall attractiveness and the climate surrounding you, how could you ever go wrong? Property in Spain is steeped in history, this country is home to a number of indigenous nations. Only 25-30 years back there’d be just a trickle of Englishmen in search of real estate in Spain. Ask everyone who has chosen to remove to Spain and they’ll tell you the same thing. Many would descry it as a trend and others descry it as a virtually a compulsion… People that are keen on moving over here may extend from young freshly weds who are looking for an exciting new life perspective to the retired looking to settle down and enjoy themselves.

Note that you may have to wrestle with a few hindrances when trying to buy real estate abroad; there’ll be hundreds of procedures whether devising a plan, sightseeing or signing the documents. If you only miss but a single procedure that can trigger insurmountable hindrances plus, of course, preeminently, money loss. Naturally, as can be presumed with this favored location, real estate might well be expensive in this destination and this, of course, is simply a result of the peaking market demand. Notwithstanding customers are somewhat spoilt in terms of choice in an area so wonderful in terms of ripping landscape. It actually has all, stock and barrel, any of us may conceivably crave, and then some.

05.06.08

What is Swing Trading?

Posted in Investment Infos at 10:32 am by admin

Swing Trading takes advantage of brief price swings in strongly trending stocks to ride the momentum in the direction of the trend.

Swing trading combines the best of two worlds — the slower pace of investing and the increased potential gains of day trading.

Swing traders hold stocks for days or weeks playing the general upward or downward trends.

Swing Trading is not high-speed day trading. Some people call it momentum investing, because you only hold positions that are making major moves.

By rolling your money over rapidly through short term gains you can quickly build up your equity.

How does Swing Trading work?

The basic strategy of Swing Trading is to jump into a strongly trending stock after its period of consolidation or correction is complete.

Strongly trending stocks often make a quick move after completing its correction which one can profit from.

One then sells the stock after 2 to 7 days for a 5-25% move. This process can be repeated over and over again. One can also play the short side by shorting stocks that fall through support levels.

In brief a Swing Trader’s goal is to make money by capturing the quick moves that stocks make in their life span, and at the same time controlling their risk by proper money management techniques.

What are the advantages of Swing Trading?

Swing Trading combines the best of two worlds — the slower pace of investing and the increased potential gains of day trading.

Swing Trading works well for part-time traders especially those doing it while at work. While day traders typically have to stay glued to their computers for hours at a time, feverishly watching minute-to-minute changes in quotes, swing trading doesn’t require that type of focus and dedication.

While Day Traders gamble on stocks popping or falling by fractions of points, Swing Traders try to ride “swings” in the market. Swing Traders buy fewer stocks and aim for bigger gains, they pay lower brokerage and, theoretically, have a better chance of earning larger gains.

With day trading, the only person getting rich is the broker. “Swing traders go for the meat of the move while a day trader just gets scraps.” Furthermore, to swing trade, you don’t need sophisticated computer hook-ups or lightning quick execution services and you don’t have to play extremely volatile stocks.

We believe that the Swing Trading method is a better way for the individual investor to attain superior investment results through short-term trading in the stock market. This trading strategy has been carefully designed for the needs of the individual investor who does not have the resources that institutions and professional money managers may have.

How to Swing Trade?

To fully understand what swing trading really is, you first need to understand what up/down trends are.

Up Trend: Simply put an uptrend is a series of higher highs and higher lows. In other words, an uptrend is a series of successive rallies that extend though previous high points, interrupted by declines which terminate above the low point of the preceding sell-off. Often the high of the last “swing” in the trend will serve as support for the next low. These areas are circled.

Down Trend: Simply put a downtrend is a series of lower highs and lower lows. In other words, a downtrend is a series of successive declines that extend though previous low points, interrupted by increases which terminate below the high point of the preceding rally. Often the low of the last “swing” in the stock’s trend will serve as resistance for the next high. These are circled.

Long Swing Trades: Once an uptrend has been identified a swing trader looks for buying opportunities in that stock. This can be identified when the stock experiences a minor pullback or correction within that uptrend. The swing trader then activates a trailing buy-stop technique. If prices break out above the trailing stop loss, you will be stopped out and long in the trade. If prices decline, your buy-stop will not be touched.

Short Swing Trades: Once an downtrend has been identified a swing trader looks for selling opportunities in that stock. This can be identified when the stock experiences a minor rally within that downtrend. The swing trader then activates a trailing sell-stop technique. If prices break down and fall below the trailing stop loss, you will be stopped out on the short side. If prices rally, your sell-stop will not be touched.

For a FREE report on HOW TO TRADE FAST, enter your email address at:

http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=12826

04.14.08

Credit Scores = ROI Profits for Real Estate Investors

Posted in Investment Infos at 7:25 pm by admin

Strong credit saves real estate investors money on mortgage finance costs. A good credit score, along with the other credit and mortgage qualifications, means that investors can pay lower fees for financing, such as points and interest charges. Also, good credit scores help you avoid garbage fees associated with nonprime loans.

However, the real money making difference for real estate investors comes into play in the return on investment (ROI). When you build up your credit score over 720, you open the way to finance multiple investment properties using other people’s money. Today, you can get investment property financing for as little as 5% down when you meet the qualifying credit requirements. This means that your ROI on your cash investment for the down payment can be significant.

For example, let’s take a home I found in Bradenton, Florida. Built in 1999, this 3 bedroom, 2 bathroom, 1600 square foot home looks like a great buy for only $219,000. Assume that the property could be purchased for $215,000. With strong credit, the 5% down cash investment of $10,750 buys into the appreciation value of $215,000. A lower credit score would mean that you’d have to put 10%-25% down or more, which lowers your return on investment. You would need $21,500-$53,750 down to buy into the same $215,000 appreciation investment. In this case, your ROI for your cash outlay would decrease significantly.

Of course, other factors like carrying costs affect your investment capabilities. The point: get your credit score over 720 so that when you’re ready to buy investment property, you get the best return on your money.

Copyright © 2005 Jeanette J. Fisher. All rights reserved

EzineArticles Expert Author Jeanette Joy Fisher

Jeanette Fisher, author of Credit Help! Get the Credit You Need to Buy Real Estate, interior design, and real estate books, has researched mortgage credit qualifications besides credit scores to finance multiple investment properties. Jeanette teaches college courses on Design Psychology and professional real estate investing seminars. For free “Credit Tips for Mortgage Financing” report, visit the Real Estate Credit Help Center at http://recredithelp.com/

04.13.08

Discipline in Trading and Investing

Posted in Investment Infos at 10:08 pm by admin

The one thing I can think of that most affects both trading and investing has to be self-discipline.

Being disciplined is fully 50% of the job of trading or of investing. I don’t care how good your trading system is, without the discipline needed to follow the system you don’t have much of a chance for success in meeting your goals.

It doesn’t matter how great a planner or organizer you are, without discipline your plans will most likely fail to bear fruit.
Discipline involves self-control, and self-control involves your ego. If you want to succeed, you must learn to trade without your ego getting in the way.

Don’t be fooled. A person’s self image must be separated from his trading or his investing. When personal self-worth gets tangled up with your business activities, it not only wrecks your best trading or investing intentions, but it also damages your self-esteem.

You hear and read about great traders and investors who have done amazing things. They tell about how great they are. They talk about “The Big” trades they made. They talk about “Big” numbers. It all derives from their oversized egos.

Don’t be misled. Sooner or later, there are “Big Downfalls.” It goes with the territory.

For a moment, let’s look at the results of what a huge ego can do. Due to his oversized ego, Nick Leeson brought down the Barings Bank. Victor Niederhoffer ran his fund into deficit. John Merriweather was so sure his strategies would work that he ended up threatening the health of the entire banking system by betting more than fifty times his capital that he could forecast, without any chance of a loss, the direction of various bond markets.

As we study the examples of these three men, there seems to be a pattern of temporary real success followed by a collapse for themselves and for those caught up in blindly following them.

Here are the kinds of problems that arise from putting your ego into the mix.

- Not putting in stops: You don’t want to be proven wrong.

- Hesitation before entry: You want reassurance before you act.

- Overtrading: You want to prove how really big you are.

- Not getting out when you should: You have married your trade and just don’t want to get a divorce. Getting out would mean you were wrong.

- Adding to a losing trade: You are making a massive effort to prove you were originally right.

- Grabbing a profit too soon: You want affirmation that you did the right thing.

- Missing an opportunity because you can’t pull the trigger on a trade: You are still living with past mistakes.

In my 47 years of trading, I have seen great traders and investors come and go. All too many of them lost everything they had ever made. The great W.D. Gann died a pauper. The legendary Jess Livermore was flat broke when he committed suicide.

I have known dozens of traders who lost money because their egos got in the way.

I agree 100% with the following statement by Marty Schwartz, the great S&P 500 daytrader.

“I’ve said it before, and I’m going to say it again, because it cannot be overemphasized - the most important change in my trading career occurred when I learned to DIVORCE MY EGO FROM THE TRADE. Trading is a psychological game. Most people think that they’re playing against the market, but the market doesn’t care. You’re really playing against yourself. You have to stop trying to will things to happen in order to prove that you’re right. Listen only to what the market is telling you now. Forget what you thought it was telling you five minutes ago. The sole objective of trading is not to prove you’re right, but to hear the cash register ring.”

To that I would add, “trade what you see, not what you think.” You cannot afford to get your ego or your opinion involved in your trading activities.
Because both trading and investing are uncertain businesses of probabilities filled with uncertain outcomes, a huge ego or a fragile ego can easily get smashed. Defending your ego saps you of energy, distorts your perception, and will eventually destroy your business.

If your self-esteem is connected to your trading and investing choices, if it goes up and down with the results of your activities, you and your business are in trouble. Your self-image needs to be strong, not at the mercy of the outcome of your trading or investment choices.

To succeed in the markets, you have to have confidence in what you are doing and confidence in yourself. But self-confidence must not become confused with self-image. Remember not to marry a market or a trade. If you see you are not right, be quick to get out. Run your trading or investing as a business. Practice self-discipline. You’ll be glad you did.

All the best in your trading,

Joe Ross
Trading Educators Inc.
http://www.tradingeducators.com/?source=ezinearticles

Joe Ross - EzineArticles Expert Author

Joe Ross has been trading for more than 47 years, and is a well known Master Trader. He has survived all the up and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits.

Joe is the creator of the Ross hook, and has set new standards for low-risk trading with his concept of “The Law of Charts.” Joe was a private trader for most of his life. In the mid 80’s he shift his focus and decided to share his knowledge. After his recovery, he founded Trading Educators in 1988 to teach aspiring traders how to make profits using his trading approach.

He has written 12 major books on trading. All of them have become classics and have been translated into many different languages.

Joe holds a Bachelor of Science degree in Business Administration from the University of California at Los Angeles. He did his Masters work in Computer Sciences at the George Washington University extension in Norfolk, VA.

Joe still tutors, teaches, writes, and trades regularly. Joe is still an active and integral part of Trading Educators.

04.09.08

Investment Strategy: The Investor’s Creed, and “Smart Cash”

Posted in Investment Infos at 6:43 pm by admin

Fascinating, isn’t it, this stock market of ours, with its
unpredictability, promise, and unscripted daily drama! But
individual investors are even more interesting. We’ve become the
product of a media driven culture that must have reasons,
predictability, blame, scapegoats, and even that four-letter
word, certainty. We are a culture of investors where hindsight
is rapidly replacing the reality-based foresight that once was
flowing in our now real-time veins… just like downhill racing,
grouse hunting, and Super Bowls.

The Stock Market is a dynamic place where investors can
consistently make reasonable returns on their capital if they
comply with the basic principles of the endeavor AND if they
don’t measure their progress too frequently with irrelevant
measuring devices. The classic investment strategy is so simple
and so trite that most investors dismiss it routinely and move
on in their search for the holy investment grail(s): a stock
market that only rises and a bond market capable of paying
higher interest rates at stable or higher prices! Just not going
to happen…

This is mythology, not investing. Investors who grasp the
realities of these wonderful marketplaces recognize the
opportunities and embrace them with an understanding that goes
beyond the media hype and side show performance enhancement
barkers. Simply put, when investment grade securities rise in
price [As they are now, with the DJIA finally putting together a
successful attack on the 11,000 barrier], Take Your Profits,
because that’s the purpose of investing in the stock market! On
the flip side (and there has always been a flip side, more
commonly dreaded as a “correction”), replenish your portfolio
inventory with investment grade securities. Yes, even some that
you may have just sold days or weeks ago during the rally. This
is much more than an oversimplification; it is a long-term (a
year or two is not long term.) strategy that succeeds… cycle,
after cycle, after cycle. Sounds an awful lot like Buy Low/Sell
High doesn’t it? Obviously, Wall Street can’t let you know that
it is quite so simple!

[Note that Dow Jones 11,000 was last breached during the
infancy of this century, and that the last All Time High in this
much too widely followed average occurred late in 1999. When the
DJIA banner is repositioned on that historical peak of 11,700 or
so, it will represent no less than six years of zero growth in
this, the most respected, of all Market Indicators! Would the
media strip the gold medal from this Stock Market Icon if it
knew that during these same years: (1) There have been
significantly more stocks rising in price on a daily basis than
moving lower. In fact, more than two-thirds of the last 68
months have been positive. (2) Since April 2000, there have been
120 more positive days in NYSE issue breadth than negative days.
(3) 250% more NYSE stocks established new high price levels than
new lows. (4) We are working on our sixth consecutive year of
positive issue breadth!]

So understand that your portfolio statement values will rise and
fall throughout time, and rather than rejoice or cry, you should
be taking actions that will enhance your “Working Capital” and
the ability of your portfolio to accomplish your long term goals
and objectives. Through the simple application of a few easy to
memorize rules, you can plot a course to an investment portfolio
that regularly achieves higher highs and (much more
importantly), higher lows! Left to its own devices, like the
DJIA for example, an unmanaged portfolio is likely to have long
periods of unproductive sideways motion. You can ill afford to
travel six years at a break even pace, and it is foolish, even
irresponsible, to expect any unmanaged or passively directed
approach to be in sync with your personal financial needs.

Five simple concepts of Asset Allocation, Investment Strategy,
and Psychology are summed up quite nicely in what I call “The
Investor’s Creed”: (1) My intention is to be fully invested in
accordance with my planned equity/fixed income asset allocation.
(2) On the other hand, every security I own is for sale, and
every security I own generates some form of cash flow that
cannot be reinvested immediately. (3) I am happy when my cash
position is nearly 0% because all of my money is then working as
hard as it possibly can to meet my objectives. (4) But, I am
ecstatic when my cash position approaches 100% because that
means I’ve sold everything at a profit, and that I am in a
position to (5) take advantage of any new investment
opportunities (that fit my guidelines) as soon as I become aware
of them. If you are managing your portfolio properly, your cash
position has been rising lately, as you take profits on the
securities you purchased when prices were falling just a few
months ago… and (this is a big and) you could well be chock
full of cash well before the market blows the whistle on its
advance! Yes, if you are going about the investment process
properly, you will be swimming in cash at about the same time
Wall Street discovers the rally and starts encouraging people to
weight their portfolios more heavily into stocks; the number of
IPOs coming to market starts to rise exponentially; morning
drive radio DJ’s start to laugh about their stock market
successes; and all of your friends start to talk about their new
investment guru or the 30% gains in their growth Mutual Funds.
What are you doing in cash!

This is what I call “smart” cash, because it represents
realized profits, interest, and dividends that are just catching
a breather on the bench after a scoring drive. As the gains
compound at money market rates, the disciplined coach looks for
sure signs of investor greed in the market place: fixed income
prices fall as speculators abandon their long term goals and
reach for the new investment stars that are sure to propel
equity prices ever higher, boring investment grade equities fall
in price as well because it now clear [for the scadieighth (sic)
time] that the market will never fall again… particularly
NASDAQ, which could double and still not be where it was six
years ago. And the beat goes on, cycle after cycle, generation
after generation. What do you think; will today’s coaches be any
smarter than those of the late nineties? Have they learned that
it is the very strength of a rising market that proves to be its
greatest weakness!

04.04.08

What Options Trading is Not

Posted in Investment Infos at 10:43 pm by admin

Like any other trading instruments like forex, index, futures, commodity or even shares trading, options trading involves learning specified trading skills tailored towards options. Furthermore, application of these skills in the real market using real money, patience, perseverance and control in terms of money management and trading psychology are all essential in your options trading journey. In summary, options trading demand a fair amount of hard work from you, thus it’s definitely not a get-rich-quick program.

As mentioned, you could buy options as cheaply as $50 per contract or you could buy options which are as high as few thousands dollars per contract. Don’t be misled by thinking you could buy a bundle of cheap options at $50 per contract and prayed that you could strike lottery if the share moves up (or down) substantially and your options would now fetch few hundred or even few thousand percents in profit. The price of the option contract, known as the premium, is set by the market maker and if its set so cheaply, just beware that there’s a reason behind it. Cheap options could be priced that cheaply because (1) the share on which the options are traded are not or not in the habit of making a substantial move (2) the option may be expiring soon thus it’s time value is diminishing rapidly. Sorry to burst your bubble but you might end up holding a bundle of options which would expire worthless if you did not bother to do your homework to check whether the stock is going to make a substantial move in your anticipated direction in the near future, ie. earnings outcome, upcoming FDA approval for drug etc.

If you want to sustain your options trading journey from the stage where you would commit every beginner mistakes till the stage where you could cut your losses quickly and decisively and learn how to let your profits run, I believe you would require at least the following pre-requisites :

1) You are not under-capitalized
From my experiences and what I read from most options trading books, web-sites, it is advisable that you have at least a minimum capital of US$5,000 to trade options. If you could afford more, of course it’s better.

In the beginning of your options trading journey, you are bound to commit trading mistakes like buying too early, exiting too late, entering the order wrongly ie. sell instead of buy, overbuying, holding on to a losing position.

Due to your inexperience, you might also end up buying options for the wrong types of stocks in the beginning. All these costly mistakes would certainly lead you to lose your capital fairly quickly. Trading losses are also known as drawdowns. Let’s say you experienced a series of losses (this COULD happen) and your capital is down 50%. If you started out with $5,000, you would still have $2,500 hopefully to turn your situation around. But if you started with $2,000 instead and after a 50% loss, you are now left with $1,000, which might not give you enough fire power to build up your trading capital especially if you still carry on losing due to your inexperience.

Thus, if you are under-capitalized, my advice is - don’t trade, unless the particular situation is extremely favourable to the options that you intend to trade eg. if you would have a high probability of winning when you buy a call in a very bullish market and likewise you would be profitable buying a put in a very bearish market.

2) You practice good money management
For instance, if you allocate only 5% of your trading capital on every trade and you happen to lose 3 trades in a row, you would have lost 15% of your capital & still have 85% of your capital left. Let’s say you started out with $5,000 trading capital and you allocate only $250 (5%) for each trade. If you encountered 3 losses in a row, you would be down $750 with a balance of $4,250 capital, still quite substantial to keep trading for a while if you continue sticking to the 5% commitment per trading rule. To recover your capital back to $5,000, you would require a 17.6% gain (750/4,250 x 100%).

Let’s say you did not practice proper money management in your options trading and you plunge $1,000 in the few 3 trades which lose money subsequently. Now you would require a 42.8 % gain (3,000/7,000 x 100%) in order to recover your capital back to $5,000.

The lower you traded down your capital, the higher the percentage of gain you have to achieve in order to recover your trading capital. Thus, it’s very important that you practice good money management in your trading right at the beginning ie. committing only 5% or less of your capital in every trade so that you could keep your trading capital for a longer period and minimize the necessity to achieve higher percentage gains in order to recover a heavily traded down account.

The following table would give you a guideline on how much percentage gains you would require to build back your starting capital.

Down % Gain Required
5% 5.3 %
10% 11.1 %
15% 17.6 %
20% 25%
30% 42.9 %
50% 100 %
75% 300 %

Hope you would bear in mind the above considerations when you trade options. For more options trading resources, visit http://myoptionsonline.com

Tony