You have to look at things like who is on the Board of Directors. How do they manage their buisness? Do the executives get paid based on performance so they have incentive do do well for their business..like the GOOGLE execs. Look at the the economy. If the product is an inferior good or a normative good. (Inferior good are goods that sell better when the economy is bad)…like Beer. When the ecomomy is better, things like Lexus’, steak, and leather will strive. Also you want to see how their competition is doing in the same sector. There are better things to look at than just charts. Charts are misleading.

Like I said, you have to do research. At least 1 hour per stock. If you don’t have the time, get a professional. Or get a mutual fund. Don’t look at past performances. Look at the performance of the captain of that mutual fund. See how he performed in the bearish years of the stock markets. See how he did in 2001 -2003. Most mutual funds underperform the S & P 500. Once you find a manager that consistantly beats the market, even in the down years, invest in it and let go of that stock once the maneger leaves too.

The price you really pay for an exercised call option is the strike price plus the premium you paid, which usually has some time premium on top of the intrinsic value. That time premium will usually be there, however small until expiration, and it will usually be more than you could get by exercising the option. SO why not just sell your option, and get MORE than you could by exercising? Also remember, there are selling commissions on the sale of the stock, and many brokers charge fees to exercise options. There are very few arbitrage situations that offer a way to make more money exercising an option rather her than selling the option in the open market.

For example:

ABC is selling for $10.00, the June $5 call is selling for $6.

You buy the call for $6, excercise the call for $5 meaning you pay your broker $5 per share to own it. You then immediately sell the shares for $10. What a deal! You bought for $5, sold for $10. Wait, no you didn’t. You paid $6 for the option, so you add $6 + $5, so your cost is $11 per share. But all you can get for it right now is $10, so, you lost a dollar a share, plus commissions.

Same scenario, you bought the June $5 call option for $6, when the stock was trading at $10. The stock moves up to $12. You exercise the option, paying $5 for the stock, sell the stock at $12. You have $5 in the stock, $6 in the option, or $11 to own each share. You sold the stock for $12, and you think you made $1. But again, you paid the fees to excercise and sell the shares, when all you really had to do was sell the $5 call option, which would have been selling for no less than $7 at the time, probably more if there is any time value left in the option. And the only commission you would pay is the option commission. You still made the same money, mybe more, but certainly no less.

In your scenario you also have execution risk, and possibly margin interest charges, because it usually takes a few days to settle an option that’s being exercised.

You’re looking for pricing arbitrage, and there are brokers, market makers, and computers out there that will find and execute any arb situations that are found (they usually don’t last more than a few seconds), and those people and firms have execution speeds and fees that you couldn’t come close to matching.

Find a stock you like. Log on to your brokers account and load up streaming quotes. Then pretend that you buy the stock at the then current price.

Now your broker or even here at Yahoo finance will let you set up a portfolio. Enetr name of stock, number of shares you would have bought and the price the stock was at when you were ready to buy.

All you do in the future is go to that portfolio and your broker or Yahoo Finance will keep it updated for you with profit and loss.

Now, the thing about having a long term position like this in place is so that you have time and space to weather short term volatility like this one (if you indeed think its short term), as such, you should not be too concerned with wasting more money hedging the position especially if you are using only money you can afford to lose (which you should be in options trading!).

Now, if you absolutely cannot risk any further downside and you absolutely think it is going to go down to 60-65 before turning up, you could do the simple thing of selling the position first and then picking it up again at a lower price when the stock has indeed reached 60-65 and bottoming.

If you want to do the complex way and possibly make a small profit even if the stock continue downwards and don’t want to miss making a profit if the stock suddenly surge upwards, you could hedge the position to delta neutral by shorting enough of the stock to cover the delta value of your call options. This will of course depend on whether you have the margin in your account to do so.

There is really no best answer here and as an options trader, you should already have your maximum risk tolerance worked out before placing a position so that when the worse happens, its within your planning. All out speculation in options trading without risk management is the expressway to losing all your money.

You can’t really protect yourself. If you bough put options it would add to your costs and possible wipe out any profit, because if the stock starts going up, you would worry about how to protect yourself from losses on the put options.

The way to make money in options is through the massive leverage. You buy a bunch of different options. You lose 100% on most of them but on the ones that work, they work really big and the profit from the ones that work cover the losses on the ones that didn’t and then some.

Good luck.

Different companies allow many different investments.

There are companies that offer Roth IRAs where you can invest in houses and even your own businesses, but usually their fees are really really high.

They are called “Self Directed IRAs”. Be careful, watch the tax laws.

Although they may have a very high level of risk, Naked Short Puts do have defined risk so many options brokers allow this type of position in an IRA.

Thinkorswim is an example of one of these brokers.

With that caveat, I find IB a great place to trade.

Stocks are shares in the ownership of a company, representing a proportionate claim to the company’s earnings and assets.

Futures are agreements to buy or sell a set amount of a commodity or financial instrument at a certain price on a predetermined date.

Options are contracts that give the buyer the right to buy (call) or sell (put) a predetermined quantity of an underlying security during a specific period of time at a predetermined price.

Bonds are investments in a government or corporation that are structured like a loan, the difference being payments are made to individual bondholders rather than to a lending institution.

Brokerages are firms that charge a fee or commission for executing buy and sell orders submitted by an investor. You will need a stock broker to be able to trade stocks.

If you are looking for a cheap method of investing, you should use a discount online broker instead of a full-service broker. Etrade is one but I would prefer an even cheaper alternative. Firstrade ( http://www.firstrade.com ) is cheaper than the big name brokers like Etrade, Ameritrade, Schwab, and Scottrade. They also do not require any minimum deposits so you can try investing without risking a lot of money. I would definitely recommend you to check them out. However, I would not recommend you to use Zecco. First of all, they do not give you the 10 free monthly trades unless you deposit more than $2,500. Second, their website is not user-friendly at all, making them not suitable for beginners.

As for trading strategies, I find stocks to be the easiest to start learning. Long term investments tend to be less riskier. If you decide to invest long term, you might want to also look into dividend reinvestment (DRIPs), which are also offered at Firstrade. However, if you are looking for even less risk, you can look into ETFs or mutual funds. For more information about ETFs, visit here: http://www.firstrade.com/public/en_us/knowledgecenter/investmentguides/guidesexchangetradedfunds/. For more information about mutual funds, visit here: http://www.firstrade.com/public/en_us/knowledgecenter/investmentguides/guidesmutualfunds/.

Regarding your question about how you can buy or sell, when you sell stock, you must wait for 3 days for your funds to settle before using them to trade again. However, this does not apply if you are a “pattern day trader.” But in order to become a “pattern day trader,” you must have at least $25,000 and a margin account.

http://friends.zecco.com/r/a7a2877caab8102b8555

Unless you learn what you’re doing, why you’re doing it and how to do it, you will loose money. Take the time to educate yourself, and you’re not going to get any education by asking simple questions here on YA that require complex responses

Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.

Start your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs.

Here is some reading material that can get you started in the right direction, The first book you should read is Rich Dad Poor Dad by Robert Kiyosaki

Then try some of these
What Works on Wall Street by James O’Shaunessey
Beating the Street by Peter Lynch
One Up on Wall Street by Peter Lynch
The Warren Buffett Way by Robert Hagstrom
How to Make Money in Stocks” and 24 Essential Lessons for Investment Success both by William O’Neil

Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance. (http://moneycentral.msn.com/home.asp http://finance.yahoo.com/ )

While at MSN following the strategy lab analysts to get a feel for what the pros are doing and why. This site has some basic information for beginners. If any site offers free information, take it.

Other website that can provide instructions and help with procedures and terminology are
Investopedia – http://www.investopedia.com/ Stock Charts – http://stockcharts.com/
http://www.investorshub.com/ http://www.1source4stocks.com/

Visit some of the more professional websites like Zacks – http://www.zacks.com/
Smart Money – http://www.smartmoney.com/ Schaeffer’s – http://www.schaeffersresearch.com/
Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it.

A brokerage house is a place where investors can buy and sell publicly traded companies, mutual funds, etc through there personal accounts. If you do not have an IRA or a 401k (retirement funds) you can open one of these here and start to save for your future.

A stock is ownership in a publicly traded company. You are entitled to dividends, voting for the board of directors, and voting for stock mergers. Go with Blue chip stocks or companies that have been around for a long time that will not go bankrupt. ie clorox (everyone needs to clean their bath.

Futures & commodities are you betting on companies that may do well in the future. These are risky.

Options are complicated and if you are not an experienced investor I would suggest you stay away from these unless you get a book and study them.

Mutual Funds was something curiously missing from your list. What a Mutual Fund is, is a company that invests in bonds, municipal bonds, cash, options, index’s all depending on the type of mutual fund. Basically all your eggs are in one basket but the basket has multiple compartments.

If you want more info on this contact me.

Online stuff is too hard to refer to when you need it.

(Warren Buffet have been investing for a VERY long time…, and he doesn’t do options)

Other than that, have you made a profit at this before, some people have a knack, others don’t.

Remember: Google is your friend.

Here’s a new site that you may want to visit:

http://www.options-trading-course.net

Yes, Zecco provides 10 free trades even at limit orders but my experience with zecco is their execution is extremely poor. Once I placed a limit sell order, zecco did not execute the order at all. The price went up about $0.50, still did not execute. Then I modified the order and placed market order, it still did not execute for at least 5 minutes. Later, my order was executed at one price (according to my history), but when I clicked on details it showed me it was executed at lower price than what my history shows. (If you need I can provide anyone the history from my account on this particular transaction.) I complained this issue to the customer service, but they don’t honor their own execution that is on my history!! How ridiculous?? Of course, you don’t get a so called free lunch.

Next, Zecco also does not post the balance immediately after your transaction. In my cases, it always takes overnight to post the balance after trading. Let say I have a 100 shares of XYZ, and no any other cash balance in my portfolio. I found XYZ is trading at $50 (for instance) , and I decided to sell it and buy something else immediately with the money I got from selling XYZ. However, Zecco did not put the money back in my account from selling XYZ until the following morning. This was a big disadvantage for me, which prevented me to buy what I wanted to buy right after selling XYZ on that day.

Finally, I don’t like Zecco customer service, first of all, it will take you forever to get hold of customer service represetative on the phone, and if you want to talk to their supervisor, they either tell you to call back in 20 minutes, put you on hold for 20 mintues and hang up or tell you that their supervisor will answer you the same thing what they can tell. The reps I spoke with, they are inexperienced, they didn’t know what they were talking about, and at times they didn’t even hesitate to humiliate me on the phone (this is my personal experience). Anyway, I do NOT like Zecco trading.

I also have an account with Scottrade and TD-Ameritrade. Even though TD-Ameritrade charges you $9.99 per transaction (however, you get FREE first month trading upto 500 transactions for a new account), it is the best one in my personal opinion. The reason number one is TD-Ameritrade has 24/7 customer service if needed, nuber two is they have an excellent and advanced research and trading tools (I am very pleased with their trading tools). Last but not least, if you are a short seller, you can short even pre-market or after hour and stocks below $5. As I described above, Zecco does NOT allow you trade any trade (including even buy or sell) pre-market or after hours. Scottrade allows you to buy or sell and to cover your shorts but not to short pre-market or after hours but not the best price you get in execution (compared to TD-Ameritrade). Scottrade also does not allow you to short sell stocks under $5. Hope this will help you to determine which online broker to use. Good luck with your trading/investing !