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Michael C. Thomsett is a widely published options author. His "Getting Started in Options" (Wiley, 9th edition) has sold over 300,000 copies. He also is author of "Options Trading for the Conservative Investor" and "The Options Trading Body of Knowledge" (both FT... More
My company:
Michael C. Thomsett, author
My blog:
Thomsett Options
My book:
Getting Started in Stock Investing and Trading
View Thomsett's Instablogs on:
  • Options And Active Trading
    The chicken's dilemma: eggs taste so good … but there could also be a downside.

    Day traders and swing traders (active traders) most often limit their trades to shares of stock; but using options solves many problems of leverage, diversification and risk.

    Click here for the full article

    Also check these books:

    Getting Started in Options

    Getting Started in Advanced Options

    Oct 21 8:41 AM | Link | Comment!
  • Synthetic Stock Positions
    A "synthetic" is any strategy that mirrors the value changes in another security. For example, a short stock synthetic consists of options that gain or lose value in the same way as declining stock; and a long stock synthetic is most advantageous when the stock price rises.

    When you set up synthetic long or short stock, you get some incredible advantages. These are easily overlooked.

    Click here for the full article

    Also check these books:

    Getting Started in Options

    Getting Started in Advanced Options

    Oct 14 9:19 AM | Link | Comment!
  • Why Choose Gold Options?

    By Arthur Witte

    Please note: The opinion expressed in this article are the author's own and do not necessarily reflect the view of Michael Thomsett or the ownership group.

    Mutual funds with gold investments help spread the risk of an investor's portfolio. However, people who are looking for a way to get exposure in the gold market without running the risk of losing too much money should stocks sharply decline should consider investing in options.

    Options give you the right to buy or sell stocks at the fixed strike prices once a contract has been traded. If a gold stock costs $20 per share, that value will be the same even if a company's per share value skyrockets to $45 in the next few ways, so long as a contract remains open.

    Options are great because they allow investors to avoid huge losses. If a stock appreciates in value, you may choose to buy the stock at the fixed strike of the contract, which is lower. Conversely, if the price of the stock depreciates, you will lose only the premium that you paid for the contract. Gold is a very expensive commodity and investing in it takes some serious amounts of money. Today, the precious yellow metal is priced at around $1,200 per ounce, and buying a good delivery bar means purchasing a 400-ounce investment.

    So far, the only disadvantage with gold options is that the stocks can't be bought per ounce. The option controls 100 shares of stock. For example, Barrick Gold's shares now costs around $14 per share. So an options contract applies to $1,400 worth of stock. That's almost the price of buying an actual ounce of physical gold, which can now be bought by the gram and stored in vaults overseas thanks to the advancements of gold investing.

    Remember, each type of investment has its own set of pros and cons. Before engaging in any sort of investment, make sure that you're fully aware of how it works. Widen your knowledge on how options work by reading articles on

    Oct 14 9:17 AM | Link | Comment!
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