US trading - US Stocks and Options
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US trading - US Stocks and Options
This is not a recommendation to trade in US, I'm posting this because some has asked me about it.
Some advise before you read on:
1) US market volumes are high gap bits up or down are big within the second.
2) You need to strictly paper trade to get used to the volatility (12 months at least, you will go through full financial cycle).
3) 3k usd can vanish within minutes, so please practice position sizing.
4) It is possible to see your position evaporate when market opens because of extended hour market gapsv (http://en.wikipedia.org/wiki/Extended_hours_trading)
5) understand key impacts to the economic calendar: http://www.forexfactory.com/calendar.php
6) nothing is guaranteed, it depends on your emotion and psyche http://daytrading.about.com/od/tradingpsychology/Trading_Psychology_Emotions_and_Day_Trading.htm
7) read read read, this is a good one Definitive Guide To Position Sizing-Van K. Tharp, got it from Cals.
more here: [You must be registered and logged in to see this link.]
I read this blogs before:
[You must be registered and logged in to see this link.]
I use [You must be registered and logged in to see this link.] and optionsxpress. However to start live trading, tda needs you to mail supporting documents to them, email scan not allowed.
For the US tax form.
[You must be registered and logged in to see this link.]
Just so you know, the pattern dat trader rule, 25k USD minimum in your account, else you agak-agak can day trade only 3 days in 5 business days.
[You must be registered and logged in to see this link.]
some more info:
[You must be registered and logged in to see this link.]
Cals,
anything to add?
Some advise before you read on:
1) US market volumes are high gap bits up or down are big within the second.
2) You need to strictly paper trade to get used to the volatility (12 months at least, you will go through full financial cycle).
3) 3k usd can vanish within minutes, so please practice position sizing.
4) It is possible to see your position evaporate when market opens because of extended hour market gapsv (http://en.wikipedia.org/wiki/Extended_hours_trading)
5) understand key impacts to the economic calendar: http://www.forexfactory.com/calendar.php
6) nothing is guaranteed, it depends on your emotion and psyche http://daytrading.about.com/od/tradingpsychology/Trading_Psychology_Emotions_and_Day_Trading.htm
7) read read read, this is a good one Definitive Guide To Position Sizing-Van K. Tharp, got it from Cals.
more here: [You must be registered and logged in to see this link.]
I read this blogs before:
[You must be registered and logged in to see this link.]
I use [You must be registered and logged in to see this link.] and optionsxpress. However to start live trading, tda needs you to mail supporting documents to them, email scan not allowed.
For the US tax form.
[You must be registered and logged in to see this link.]
Just so you know, the pattern dat trader rule, 25k USD minimum in your account, else you agak-agak can day trade only 3 days in 5 business days.
[You must be registered and logged in to see this link.]
some more info:
[You must be registered and logged in to see this link.]
Cals,
anything to add?
kppl- Senior Member
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Join date : 2012-01-31
Stock Portfolio : AIG, DHI, ORCL, CSCO, BRK.B
-ve
Re: US trading - US Stocks and Options
trying to sticky this
Cals- Administrator
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Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis
Re: US trading - US Stocks and Options
Question received:
Call option, exercise 40 usd. (in options its called the strike price)
Scenario 1- share at 60 usd. Exercise to gain 20 usd.
Scenario 2- share at 40 usd. Might or might not exercise.
Scenario 3 - share at 20 usd. Do not exercise because losing money.
In all three scenarios there are potential of gains. Why?
Comments:
You may look at trading basic options as trading warrants. You are buying a piece of contract to purchase shares at a target price (strike price).
Warrants have conversion rations, how many warrants to 1 mother share.
Options are normally fixed, 1 contract to 100 mother shares. There are mini options where by 1 contract to 10 mother shares. The platform you use will highlight these.
When prices of the mother share goes up, the option price goes up. Even if the mother share price is below the strike price, the option will hold some extrinsic price (time value) until the expiry date (closer to expiry OTM options may have zero value).
Same as warrants, warrants have a price even if the mother share has not yet reach its exercise price (some may be as low as half cent).
You are trading based on the value of the contract and do not necessary have to convert it.
As long the expiry date is not passed you are still able to buy/sell the option hence all 3 scenarios above have potential to make money, its when you buy the option and sell it at a higher price (provided the mother share price goes in your favor).
More on value here:
[You must be registered and logged in to see this link.]
Call option, exercise 40 usd. (in options its called the strike price)
Scenario 1- share at 60 usd. Exercise to gain 20 usd.
Scenario 2- share at 40 usd. Might or might not exercise.
Scenario 3 - share at 20 usd. Do not exercise because losing money.
In all three scenarios there are potential of gains. Why?
Comments:
You may look at trading basic options as trading warrants. You are buying a piece of contract to purchase shares at a target price (strike price).
Warrants have conversion rations, how many warrants to 1 mother share.
Options are normally fixed, 1 contract to 100 mother shares. There are mini options where by 1 contract to 10 mother shares. The platform you use will highlight these.
When prices of the mother share goes up, the option price goes up. Even if the mother share price is below the strike price, the option will hold some extrinsic price (time value) until the expiry date (closer to expiry OTM options may have zero value).
Same as warrants, warrants have a price even if the mother share has not yet reach its exercise price (some may be as low as half cent).
You are trading based on the value of the contract and do not necessary have to convert it.
As long the expiry date is not passed you are still able to buy/sell the option hence all 3 scenarios above have potential to make money, its when you buy the option and sell it at a higher price (provided the mother share price goes in your favor).
More on value here:
[You must be registered and logged in to see this link.]
kppl- Senior Member
- Posts : 2270 Credits : 2611 Reputation : 150
Join date : 2012-01-31
Stock Portfolio : AIG, DHI, ORCL, CSCO, BRK.B
-ve
Re: US trading - US Stocks and Options
House of Representatives vs Senate
The United States Congress is the legislative branch of the federal government and consists of two houses: the lower house known as the House of Representatives and the upper house known as the Senate. The words "Congress" and "House" are sometimes colloquially used to refer to the House of Representatives.
Democrats currently have a majority in the Senate and Republicans control the House.
Seats in the Senate vs House of Representatives
While there are 100 seats in the Senate (two from each state), there are 435 seats in the House of Representatives, one each from the various congressional districts (the number of congressional districts in each state is determined based on the population).
House vs Senate Terms
Senators are elected for a six-year term but House Representatives only get a two-year term before they need to seek re-election.
The United States Congress is the legislative branch of the federal government and consists of two houses: the lower house known as the House of Representatives and the upper house known as the Senate. The words "Congress" and "House" are sometimes colloquially used to refer to the House of Representatives.
Democrats currently have a majority in the Senate and Republicans control the House.
Seats in the Senate vs House of Representatives
While there are 100 seats in the Senate (two from each state), there are 435 seats in the House of Representatives, one each from the various congressional districts (the number of congressional districts in each state is determined based on the population).
House vs Senate Terms
Senators are elected for a six-year term but House Representatives only get a two-year term before they need to seek re-election.
kppl- Senior Member
- Posts : 2270 Credits : 2611 Reputation : 150
Join date : 2012-01-31
Stock Portfolio : AIG, DHI, ORCL, CSCO, BRK.B
-ve
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