What You Need to Know About Trading Options on DPM

Option trading can help you pick up strong stocks at a bargain by selling put options and there is fertile ground in the energy sector.  A recent option play in the natural gas segment that might be worth taking a hard look at.  Forbes contributor, StockOptionsChannel.com, wrote a good piece on a stock that has potential but could be picked up at a discount and makes a compelling case, but there is one thing that troubles me about it.

Check it out and be sure to read my commentary at the end:

“Looking back to 166 days ago, DCP Midstream Partners LP DPM -0.51% (NYSE: DPM) priced a 12,500,000 share secondary stock offering at $48.90 per share. Buyers in that offering made a considerable investment into the company, expecting that their investment would go up over the course of time and based on early trading on Tuesday, the stock is now 7.5% higher than the offering price. It should be noted that investors at the secondary have collected $1.50/share in dividends since the time of their purchase, so they are currently up 10.6% on their purchase from a total return basis.

Investors who did not participate in the offering but would be a buyer of DPM at a cheaper price, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the January 2015 put at the $45 strike, which has a bid at the time of this writing of 45 cents. That would result in a cost basis of $44.55 per share before broker commissions in the scenario where the contract is exercised. If the contract is never exercised, the put seller would still keep the premium, which represents a 1% return against the $45.00 purchase commitment, or a 2.3% annualized rate of return.

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Swing Stock Trade Tips

Swing Trade Stocks: Stock Market Tips

 

Swing trade opportunities appear each day.

Swing trade opportunities appear each day.

Learning how to swing trade stocks is one of the most basic strategies employed by traders today. It requires a basic skill set and can be very profitable when done correctly. For those who are currently thinking about branching into swing trading, following are some tips on how to proceed with caution.

Sell Non Trending Stocks

Most traders will purchase a stock with the anticipation that it will increase in value over the next few days. More often than not, the stock value will follow the predictable pattern and may be sold back to the market. However, there are times when the value is neither increasing nor decreasing. In some cases, the changes are so incremental that it doesn’t even reach the trader’s target profit for reselling. If this is the case, then just let the stock go either way. A non-moving value usually means that buyers are not interested in the share and sooner or later, it will likely go down in value. Instead, invest on something that will allow fast cash movement for even faster profits.

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How To Swing Trade Stocks

Swing Trade Stocks – Understanding Swing Trade

 

Swing Trade Stocks

Opportunities to swing trade stocks for quick profits occur daily among thousands of stock candidates.

Swing trading is one of the most basic techniques when it comes to trading. It’s something beginners at the stock market usually use to get good profits from their first few attempts of playing the stock market.

 

 What is swing trading?

Swing trade stocks are when traders hold a position for more than one day. The hold usually lasts for two to five days before it is once again sold. The reason for this is that is usually takes this long for a significant change to occur in the value of a stock.

 

Why do swing trading?

Aside from the fact that significant profits usually happens after holding a stock for several days, the time frame is also advantageous for non-professional traders. Specifically, those who are holding down eight to five jobs will find themselves easily adapting to swing trade stocks because it doesn’t take up much of their time and effort.

 

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Smart Stock Trading Strategies

Smart Stock Trading Strategies – Getting Right Down to Business

Stock trading, Tokyo Stock Exchange

Stock trading systems make up the bulk of trading volume like on the Tokyo Stock Exchange. —Dick Thomas Johnson (Flickr.com)

Trading in the stock market is always a gamble in a sense, but we can always learn stock trading techniques and strategies so we can have better chances to earn profit from every trade we make. It’s important to remember foremost that you can never hope to be a winner in every trade you make or attempt. Every stock trading strategy you apply must be smart enough to leave room for any losses you incur. Aside from the promises of returns, effective strategies must also know how to define risks for whatever they are.

Trading stocks is also a prospect not made for everyone. It’s a sad truth in this world every trader must keep in mind at all times since this fact can hit anyone anytime. While some can stand up to the pressures of the trade, some just can’t. There may be a number of those who can generally handle the heat and all, but only a small percent of that population will be successful at the end of the day.

Also, in learning how to trade stocks successfully, there are no definite rules to help mold a successful stock trader, the big boys roaming walking all over Wall Street in style are legends in their own rights for their killer moves in the shortest time possible all share some common characteristics you would love to have on your list too.

Effective Trading Strategies

To begin with, these guys start from scratch by developing winning stock market trading strategies they could exploit to win. They also make it a point to relentlessly follow their system they have developed to achieve higher-level performance with their investment capital. They understood perfectly well how small daily profits earned can be translated into annual returns large enough to call for a celebration.

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The Need to Arm Yourself with Stock Trading Strategies

The Need to Arm Yourself with Stock Trading Strategies

Stock trading, NYSE trading floor

Stock trading strategies are used each day on the  NYSE trading floor to minimize risk and maximize profits.—ilamont.com (Flickr.com)

People playing the stock market -yes, you see this happening all the time. It’s the simple act that drives men to invest their money wisely so it can be transformed into profit. People everywhere put their belief on certain companies and purchase stocks from them. These are companies, they believe, will stay strong and stable in the long term due to their utilization of future inventions and technological advancements, or simply due to their popularity in the market. The more popular stocks are the higher anyone can expect their respective prices will be.

Wise men from both the old and new are one in saying that the best way to realize profits from such venture would be to make investments in relatively unknown companies, sit down, relax, and just watch how your money grows as the company picks up its momentum and grow as well – should the company of your choice grows that is.

Another safe and smart way to go about your trading business would be to choose a company with a steady growth record over the years. This means looking at the big boys in the market.

Developing Your Own Stock Trading Strategies

To trade stocks successfully, you must understand that the act involves both science and art. You must learn how to make them work and dance together in beautiful music. The science part tells you to suit up and work to gain a real understanding on stock trading fundamentals. This is obvious for the most part, and traders had learned to gear up for such challenges long before they were already called successful traders.

It’s the art part that brings life to all these. It is something that will always remain unique to every trader. And it’s something you must learn to appreciate as well so you will not get confused and suffocated with all the technicalities involved along the way. A big part of your success as a trader would be having the courage and the will to find out what stock trading systemsshould work best for you. “Do I have more than enough money to invest in certain strategies without having to risk myself to financial ruin along the way?” “Does the strategy of my choice dictate that I have to have passion for the specific industries in which I will be purchasing my stocks?” “Do I have the capacity or rather can I expertly handle and consider the volume of data flowing right in front of me that will be required when following certain strategies?”

Better yet, “Am I equipped with the resilience and the courage to deal with the ups and downs of my chosen strategy and the world of stock trading in general, and the patience to go with the strategy until its completion?” These questions on how to trade stock should aid you in determining stock market trading strategies that fits your style and personality comfortably.

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Stock Trading Strategies

 

 

The Thing with Past Performance

“Simple Investing” is oftentimes the most basic of all stock trading strategy there is. It is also the first. This works by basically looking at past data of companies in relation to its behavior during the changing of the economy. You can score big points by exploiting this past history to figure out the “buy-and-sell” trigger points. With it you can then adjust your stock market trading strategy as it needs to be on a quarterly basis based of course on the behavior and other data to the quarter before it. If you are a risk taker yourself, and you are willing to make some little sacrifices on your total potential as you tweak things around, then this is a great strategy for you, although you have to be thorough on all the angles involved at first before launching this smart  trading strategy. Otherwise, you will just be wasting your time.

Which brings us to “Time.” Instinctively, we always look to time to delineate various stock market trading strategies. Folks armed with the mental resilience and the financial resources to play the game are learning that short trading cycles (and even day trading in some areas) are quickly becoming an optimum way to create money using stock trading. But in an honest sense, optimum stock market trading strategies are the complete opposite to penny stock trading activities. What you can do best here would be to save through your trade commission using quarterly-based strategies.

Always remember that you trade because you want to make profit out of it. Focus your thoughts on it at all times and you will never go astray.

How to Trade Stocks Online – Analysis and Styles

How to Trade Stocks Online 

Stock trading, New York Stock Exchange

In the modern age, you have the same tools  as NYSE floor traders to learn how to trade stocks online.  New York Stock Exchange—BlatantWorld.com (Flickr.com)

If you’ve been in studying how to trade online for any length of time, its apparent that many aspiring traders are currently reading alot of the same articles as you are on how to trade stocks online. Soon enough though, such people would realize that most trading tutorials highlight the same information. Indeed, those who truly wish to become successful swing traders would not just be interested in basic how-to guides. To put it simply, they would also be eager enough to discover the much more complicated aspects of swing-based trading strategies. Well, those who want to broaden their understanding of such complex swing trading fundamentals need not worry. After all, engaging in a quest for knowledge is as easy as reading on.

Trading Stocks Online – Two Analysis Options

People who want to learn how to trade stocks online should keep in mind that there are two ways of analyzing securities. The first evaluation method is generally referred to as technical analysis. As its name implies, technical analysis mainly involves the need to evaluate numerous graphical tools, which in turn means that it would be a must to pay attention to both growth trends and value fluctuations. With this in mind, it becomes clear that by applying such an assessment approach in one’s trading endeavors, one would only be able to pinpoint the most profitable shares on a short-term basis as such graphical aids provide time-limited data.

Those who wish to carry out a much more thorough assessment before finally trading stocks online would have to make use of fundamental analysis. In particular, traders who rely on such an approach to stock selection pay attention to the various determinants of a firm’s overall worth. To explain, fundamental analysts exert effort to gather information from a company’s balance sheet and income statement so as to find out whether growth would really be possible regardless of current trends. It should be emphasized however, that fundamental analysis mainly highlights long-term opportunities and thus is not a common choice among swing traders.

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How To Trade Stocks Online

 

 

 

Without a doubt, individuals who wish to learn how to swing trade stocks usually think of a certain question after reading several basic how-to guides: do several trading styles exist? The answer is yes. In particular, swing traders could be classified into two distinct groups based on their opportunity-selection preferences: mechanical and discretionary. To put it simply, mechanical swing traders are those who mainly rely on the capabilities of trading software. Essentially, such computer-reliant traders carry out transactions by configuring applications to evaluate stocks based on their preferred technical and fundamental parameters.

Discretionary swing traders on the other hand, make use of both parameters and insights. To explain, such traders do spend time to list down numerous trading guidelines so as to maintain a suitable level of objectiveness. However, discretionary traders also take advantage of their gut feeling that is mainly driven by experience and knowledge. Indeed, unlike their mechanical counterparts, discretionary swing traders should be able to make quick decisions even when sudden changes in a stock’s value emerge. In addition, swing trading stocks through a feeling-based approach would allow one to benefit from sideways trending markets.

At this point, one might assume that it would simply be best to adopt a discretionary trading style, believing that such an approach would allow them to overcome the various limitations of computer-driven approaches. One should keep in mind that the inclusion of a human-factor in online stock market trading brings forth a certain downside: emotions might affect one’s trading choices. To explain further, profits previously made through the shares of a particular firm might lead to false assumptions about the current profitability of the company’s stocks. Essentially, there is a possibility that a trader would unknowingly “love” certain shares.

On the Never-Ending Endeavor

As made clear throughout the discussion, learning how to trade stocks effectively involves the need to discover matters pertaining to options and styles. To reiterate, those who want to become a swing trader should spend time thinking about technical and fundamental approaches to stock analysis. As also mentioned, it would be imperative for any aspiring trader to consider the differences between mechanical and discretionary trading styles. Nevertheless, it would certainly be appropriate to say that even upon carefully choosing among such approaches to trading, one should never stop learning about the other aspects of how to swing trade stocks.

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