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Stock Trading - Selling Time (Make Money Like A Real Stock Professional)
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Time will pass. That is for sure. Time will pass. The question is, can you capitalize on that or not?

If you can capitalize on it, then you have a "sure-fire" money maker (because time will pass).

Well, I'm here to tell you that stock traders have found a way to profit form the passage of time. And here I will give you a brief outline of how it works, so that you can go and do the same.

The thing is you must use options to make this work. If you're not trading options, you are missing out on some great opportunities.

When you trade more than one option at a time, it's called a spread. If you pay money for the spread it's called a debit spread. If you receive money for the trade, it's called a credit spread.

Usually a credit spread is theta positive. That means that it will make money over the passage of time. So a credit spread is the spread we want to put on. How do we go about this?

Let's say that a stock is trading at 43. Now it's not going up in price, it's going down. What we do is look at out-of-the-money call options (those that are higher than the current price).

Perhaps we sell the 45 option and buy the 50. The 45 is closer to the price than the 50. So the 45 is more expensive. By selling it, we take in more money than we put out. Now, as long as the price stays below 50 at expiration, we will make some money. If the price is below 45 at expiration, we will make the full credit that we go for putting the trade on.

Do you want to learn more about how I do it? I have just recorded a 25 minute CD called "How To Pick Winning Stocks - The Secret Formula"

Request your free copy here: Click here for your free CD [http://www.mytradinguniversity.com/CD]

Article Source: http://EzineArticles.com/?expert=Nathan_Pennington

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Article Submitted On: February 08, 2008



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