Sometimes you make money, sometimes you don’t.

You hear hot investing tips all the time. They sound good to you, so you invest. But later, you find that you haven’t really made any money off of your investment. Why not?

Most beginning investors in the stock market should completely avoid hot tips of any nature. You should be concentrating on learning how to invest, and keep investments that have a nice, steady growth pace. Do this by investing in proven performers that have low fees. Spec stocks (speculation, which involve most tips) are for those experienced in the ins and outs of investments. And for those who can afford to lose money.

Your retirement and college funds should not be put into spec stocks. These are things that you don’t want to lose on a hot tip. Remember, it is actually harder to make money than it is to lose it in the stock market. That is why you must make wise investment decisions.

Stocks make and lose money for a variety of reasons. They make you money by turning a consistent profit that pays the dividends on the stock you bought. They may outperform all of their industry competitors. You are often looking for a stock that will provide you with solid returns over time. You find this is financially strong companies that are known to be a good investment. If you sell, the stock is in demand and you will get a good price for it.

Stocks lose money when consumers don’t want their products or services. It doesn’t matter what the product is. If people aren’t buying it, sales will suffer and the company won’t make a profit. They may simply charge too much for their products, or market them ineffectively. The company may be unable to compete in their industry.

Many companies have officers and boards that mismanage the company’s money. They could be dishonest in the usage of company funds; for example, WorldCom and Enron. They falsely report company profits or doctor their financial statements.

Some stock is simply not appealing to a large number of investors. When there is little demand, you will often sell for less. You may even encounter brokers that manipulate a stock price and then take a dishonest profit by dumping their stock. You are then left with a worthless stock.

The factors in the profit or loss of a stock are endless. There are market conditions, economic factors and world events to consider. In many cases, there is no reason why a stock goes up or down. Investors are known for displaying unknown reasons for buying and selling. Because of this, the market is often unpredictable.

For all these reasons, it is increasingly important that you are precise in your investment choices. If you are planning to invest, make it for the long term. This reduces the risk of losing money. Manage your stock portfolio using wise investment strategies and you will win more than loose.

Martin Lukac http://www.MartinLukac.com , represents http://www.RateEmpire.com , an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com

There are a few tricks that can help your investment portfolio — orders. They can help make your trades meet your personal requirements and goals. From the basic market order to the trailing stop losses, you need to know what orders can do for you.

The simplest type of order is the market order. This tells your broker that you will take whatever price is presented when your order is executed. Market orders have the lowest commissions and are the easiest to execute.

For example, you are looking at purchasing 100 shares of X. The current market price of X is $53.95. You call your broker and tell him to place a market order for 100 shares of X, ticker symbol XXX. By the time that the order actually executes, the market price may have risen or fallen. You are hoping that it stays the same or goes down in the above example.

A limit order will limit the price you pay or accept when buying or selling. Market orders are always executed; however, the limit order has no guarantee.

For example, you want to buy 100 shares of Y. The current price is $29 per share. You are looking to purchase for no more than $27.50, so you place a limit order at $27.50 or less. If the stock falls, your order will be executed. If it doesn’t fall, it won’t be executed. Limit orders are executed in the order in which they are received. You also have to be aware that your order will be executed at your limit price. If it falls below that, you will still pay your limit price.

All-or-one orders insure that you are placing your order at a single price at once. This occurs when you do not want the trade executed unless it is in one single transaction. The minimum qualification for an all-or-none order is 300 shares or more. If there are not enough shares available, your order will not be executed. The order will not be executed if you have other orders with special conditions already in place. And they can only be applied in conjunction with a limit order.

Stop and stop limit orders are also commonly referred to as stop loss orders. They are used to lock in the profits from profitable trades. A stop order converts into a market order when the preset price is reached. At that point, the order is guaranteed to be executed, but you don’t know what price it will happen at. Just like with a market order.

The stop limit order becomes a limit order once the stop price is reached. You may or may not be able to see your order executed depending on the price of the stock.

Orders are a great way to manage your account through your broker. You set your limits and they are followed. Knowing how to manage your orders is an essential part of investing.

Martin Lukac http://www.MartinLukac.com , represents http://www.RateEmpire.com , an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com

Both dividends and share buybacks are often cited as ways for a company to “return money” to its shareholders, as if they were functional equivalents. But they are not equivalent at all.

In fact, the only similarity between dividends and share buybacks is that the company uses a portion of its retained earnings to pay for them. If you are a shareholder, that is really your money being managed by the corporation. The Sensible Stock Investor should not be indifferent to which method the company uses to “return money” to its shareholders. Let’s see what the differences are and decide what is better for the Sensible Stock Investor.

Dividends are simple: The company sends you money. Dividends are usually declared quarterly, approved by the Board of Directors, and sent out to shareholders a few weeks later. The Board declares, say, that the dividend will be $1.00 per share. If you own 100 shares, they send you $100. What could be simpler?

Share repurchases are not complex either, but there’s more going on than with dividends. With share repurchase programs, the Board authorizes using some of the company’s retained earnings to buy shares of itself on the open market. The plan might be, for example, that over the next six months, the company will purchase 1,000,000 shares of itself, taking them in-house and therefore off the market. If the stock sells for an average of $20 per share during the program, the company will spend $20,000,000 to buy back its own shares.

Why are these two very different corporate actions often spoken of as equivalent ways to “give money back” to shareholders? Because, theoretically, in each case the company is using some of its retained earnings to transfer something of value to its shareholders. With dividends, the “something of value” is money itself. The company sends you a check. With share buybacks, the “something of value” (theoretically) comes in the form of an increase in the value of each share remaining on the market. After the company buys back X shares, every remaining share is (theoretically) worth more to its owner. The corporate pie has been sliced into fewer—and therefore slightly larger—pieces. The total number of outstanding shares declines, so each remaining share represents a larger percentage of ownership of the company, a slightly larger claim on its future earnings.

OK, say you are a shareholder in the company. Should you care which route the company chooses to send you “something of value”?

Here are the pros and cons of dividends:

• Pro: They are cash in your pocket, real money. There is nothing theoretical about it. You can reinvest that money in the company, or you can do anything else you want with it. You can use it as income.

• Pro: Most dividend programs are tantamount to corporate policy. Companies rarely cut or eliminate dividends. Even though each dividend payout is a separate event, the overall program is sacrosanct at most corporations that pay dividends.

• Pro: Dividends help support a higher share price, assuming that the market places a value on strong dividend programs. Studies show that over long periods of time, the market does place a value on dividend programs.

• Dividends are closely watched and reported, so information about them is easy to obtain. Over time, companies establish dividend patterns which are pretty predictable. Significant changes in the pattern are reported instantly.

• Con: You must pay taxes on the dividends. However, the federal income tax rate of 15% on dividends makes it one of the least-taxed forms of income available.

Here are the pros and cons of share buybacks:

• Pro: Since no money is sent to you, you are not taxed.

• Pro/con: The share repurchase reduces the number of shares circulating, thus increasing the value of the remaining shares. However, to realize this increased value, the market must reprice the remaining shares upwards. The passage of something of value to you is only theoretical unless and until this happens.

• Con: No money is sent to you. If you want the money represented by the increased value, you must sell some of your shares. The money you receive from the sale is then taxed at either the long-term or short-term capital gains rate (assuming that the sale is at a higher price than you originally paid for the shares). The federal long-term rate is 15%, the same as with dividends. The short-term rate is your marginal tax rate, which is probably higher.

• Con: Share repurchase programs are “one-offs,” not regular programs at most corporations. They are not predictable as to size or frequency.

• Con: Share repurchase programs are not monitored closely. Many of them are never completed after their initial announcement. Such failures are inconsistently reported in the financial press.

• Con: Many companies repurchase shares in order to pay off their executives (and other employees) on stock option grants. The executives turn around and sell the shares back to the company immediately, because they are part of their compensation package. Thus, the company’s share buybacks are a compensation expense to the company. The executives, not the owners, are getting the money.

• Con: Often, share repurchases are made when the stock’s price is highest. That is because the program might be implemented in response to a burst in profits, which drove the share price higher in the market. It might also be because the company needs the shares now to pay off options which are being exercised—the timing of which the company cannot control.

It is an unfortunate fact that, at many companies, management acts in a fashion which benefits itself more than shareholders—even though the shareholders are the owners of the firm. Why does this happen? In a large, widely-held company, the Board of Directors—whose fiduciary duty it is to protect the long-term interests of the shareholders—is really a captive of management. Management proposes, and the Board rubber-stamps, ineffectively executing its oversight function. That’s what is at the bottom of so many of the corporate scandals of the past decade.

Contrast this with a privately-held firm. Some of these firms can be quite large, but their ownership is not very dispersed compared with that of a publicly held company. At such a firm, the company runs things for the benefit of its owners—who often sit on the Board. The Board is not captive of management, management is a captive of the Board—which is as it should be. At such firms, you better believe that high dividend payouts are part of the deal for the owners. Dividends rank well ahead of buybacks as claims on corporate profits. Whatever earnings are not required to fund current operations or expansion are funneled directly to the owners. If you were the sole owner of a company, isn’t that what you would do?

So, if one of your investment goals is current income, it should be obvious by now that dividends are far more desirable than share repurchases. They come regularly (and are often increased); they come in the form of cash, which is income immediately; they are taxed at a low rate; and they do not require you to sell shares in order to realize the “something of value” being passed on to you. Furthermore, the fact that management maintains a strong dividend program suggests that the company is being run for the well-being of its owners, not for management. Management is probably making smarter decisions with the retained earnings it has left (after dividends are paid), which can only benefit you as a long-term shareholder.

If you would like to learn about a stock investment approach that that uses the same strategies reflected in this article, including how to identify reasonably priced dividend-paying stocks, please consider purchasing "Sensible Stock Investing: How to Pick, Value, and Manage Stocks." Click on this link to go directly to the book’s page on Amazon.com: http://www.amazon.com/gp/product/059539342X/sr=1-1/qid=1155381420/ref=sr_1_1/002-5852738-5260830?ie=UTF8&s=books . Or click on this link to learn more about the book: http://www.SensibleStocks.com

I encourage you to reproduce this article or any portion of it. If you do so, please include the title, author, and the following Web site address: http://www.SensibleStocks.com . Thank you.

Over the years all Over-The-Counter Bulletin Board (OTCBB) stocks are traded either directly or by call in. Both processes take much time and causes physical/mental stresses. Now there are a few companies which offer electronic OTCBB stock trading service on specialized direct access trading software platforms. Most of these companies are online stock brokerage firms want to make their space in OTCBB and Penny stock industry.

The introduction of online OTCBB stock trading service is believed to be a crucial step, as it enable all OTCBB traders to buy and sell like a online stock market trader. The main advantages of online OTCBB stock trading includes; stocks trading without broker intervention, high speed order execution, real time news, historical and intraday stock charting, time sales, and direct access to major OTCBB markets such as Knight, NITE, DOMS, Finance 500, SBSH, VERT, Citigroup, FANC, ARCA etc,

In addition to these advantages, some direct access brokers also let you to trade stocks markets, options, futures and pink sheet securities from your OTCBB trading software and account. Some offer flat fees for unlimited number stocks per trade. The software platforms offered by these online brokerage firms are either their stock trading platform or a modified form of it. They can be web based free systems or direct access customizable systems.

What makes online OTCBB stock trading a revolutionary idea is its simplicity. Even a beginner individual stock trader can trade over-the-counter bulletin board stocks with much ease. One can trade from anywhere the world with a suitable platform selected and customized by him or her. This new service is beneficial for especially those investors trading highly active sub penny securities.

But currently there are only one or two online brokerage firms, like NobleTrading, that offer this service. Being a riskier trading industry, most brokers are turning their face of from this service. We can hope that in future more competitors will evolve and more affordable trading plans will be established.

Praveen Ortec is an offshore worker for NobleTrading.com, a leading online trading company offering Online Stock Market Trading and Online OTCBB Trading.

In the foreseeable future, the inevitable “baby boom” generation will retire and require a copious amount of medical treatment. While such deduction is fairly well-known, I believe a lot of what has been said has underestimated the severity of the repercussions new and old diseases will bring to these potentially unfortunate individuals. While such a claim may seem ominous, healthcare companies are constantly working to provide new treatment to abate much of this danger. As a consequence, there is, I believe, a tremendous opportunity to invest in some of these healthcare providers such as AngioDynamics (ANGO), to not only understand the products they are making to help individuals, but to help increase your capital gains.

I picked AngioDynamics for a multiple of reasons. It is true that such company has strong competitors such as Baxter, Boston Scientific, and Alcon, but after reviewing what AngioDynamics specifically does, I believe, it is the only one out of these companies to provide full treatment of peripheral vascular disease. While some may argue that a company like Boston Scientific provides for all types of diseases, like Warren Buffet alluded to, he purchases shares of companies that he knows a good deal about and which have a strong concentration ratio in relation to their field: traits which AngioDynamics absolutely encompasses. Thus, in addition to this strong percentage relative to the rest of the playing field, because healthcare, despite the Democrat majority in Congress, will have tremendous implications in the future years, AngioDynamics can become an amazing investment opportunity.

To further examine more specific aspects of AngioDynamics, an investor must carefully observe the fundamentals and the growth or loss each number is responsible for. Containing growing margins in terms of revenue and experiencing growth relative to gross profit rise almost 27% last year, AngioDynamics, a fairly new firm, has the potential in the near future to utilize its growth into capital gains for its shareholders. In addition, despite the fact that AngioDynamics has seen falling operating income over the past year, this company has still maintained to provide growing cash on a year to year basis. Such growth rose 34% over the last year which correlates to more investment opportunities, research, and capital expenditures which, I believe, are more crucial to healthcare companies than in almost any other industry. In addition, assets to liabilities, in the form of the current ratio, has been outstanding relative to most other corporations, and such strong fundamentals has provided a reasonably strong P/E ratio multiple of about 40. It’s true that competitors such as Alcon may have smaller multiples and seem more attractive, but looking at forward ratio pricing in addition to basic fundamentals, AngioDynamics will provide a much lower multiple as understood by the forward P/E ratio. Furthermore, as 2007 looks to be a solid year for fundamentals, as the American economy is at its peak point in relation to the economic cycle, there is even further support for the numbers of AngioDynamics to continue to grow.

Speaking now in the form of technical analysis, it is true that this company has traded publicly for only a few short years, but nevertheless, there are some observations I have made to support my purchasing campaign. From about 2005 to 2006, this company has been relatively flat after a strong growth period related to its IPO price. It is true that the company was balancing between a resistance and support level throughout these months, but careful observation has led me to believe such levels were changing every so slightly to provide a slow, fluctuating growth pattern. Now, many investors may argue that such may be the case and would look appealing, but the strong decline that this company recently posted in July may hinder some of the optimism associated with this newly traded healthcare company. It is true that such decline was provided on the basis of high volume, but looking almost three months later on September 25th 2006, AngioDynamics grew relative to share price grew almost 12% in one week on incredibly strong volume. Such has led me to decide that this company has corrected itself and will continue it’s slow by growing rate, pending its sustained strong fundamentals. Thus, while such company may not seem very beneficial to invest in for the short term, because the share price is relatively cheap and because of the strong indications that this company will at very least be restored back to its resistance level in the foreseeable future, such investment may be a wise one for long term investors.

Therefore, by examining the usual strong fundamental and technical analysis I am truly akin to, and by understanding how healthcare, and more specifically this company relates to the market and its competitors, I believe there is tremendous optimism for investors who want to place there savings into a secure investment. It may be true that AngioDynamics is relatively new, but without risk there is no reward, and in this case there is a lot more reward, outbalancing the risk factor.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr

When it comes to the price of a stock, the number one question is whether or not it is a good deal. The price/sales ratio is vital in determining if the market has undervalued or overvalued the price of a stock.

You need to know various things about a stock before you invest in it. Does the stock have room to grow? Is it moderately priced when compared to its industry associates? Are there solid growth prospects, not just gut-feelings?

A stock may have these factors, but still be overpriced. That doesn’t mean you should completely rule it out. Just keep it in mind for when the price goes down to a more attractive level.

You can use the price/sales ratio of a stock to make an informed investment decision. The price of the stock actually tells you very little. You can’t just look at a price and know whether or not it is a good buy. You have to have background on the stocks you are considering. Only then can you accurately compare different stocks for purchase.

This ratio allows you to evenly compare companies. You simply divide the market capitalization, or outstanding shares times the price per share, of the company by its revenue. For example, a company may have 100 million outstanding shares. The price per share is $55, making the market cap $5.5 million. You then divide the $5.5 million by the company’s revenue.

When you divide the market cap by the revenue, the ratio that results will help you compare different companies. The lower the ratio number, the better the investment is. However, the ratio is only truly effective when comparing companies in the same industry.

Say you are looking at two tech companies. One has a ratio of 1.8 and the other has a ratio of 3.2. The entire industry group has a ratio of 3.3. Both stocks have a better ratio than the industry average. But the first stock is a better value.

Keep in mind that there are other factors to consider as well. The price/sales ratio and the price/earnings ratios could contradict each other — this isn’t a good sign. You should also be wary of one-time events that affect the company temporarily. Most reports will include the price/sales ratio and the price/earnings ratio for you.

Remember, you have to pick the right companies and then compare their price/sales ratios. This will help you in determining whether or not a stock is a good deal.

Martin Lukac http://www.MartinLukac.com , represents http://www.RateEmpire.com , an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com

Average investors are able to spread their investments among many different companies and industries without a lot of work.

Many beginning investors want to seek out and research the companies they are investing in. Others simply want to start investing. They are looking for a way to buy quality stock without the work. Blue Chip Baskets are a new way to invest in several stocks at once.

Blue Chips have many benefits. Although they are often considered the retiree’s choice, they have proven to be conservative investments that pay.

Morgan Stanley Dean Witter created Blue Chip Baskets in order to allow investors to buy into several blue chip companies at once. Your money basically purchases you tiny portions of different stocks. You could invest $50 and get 1/10 a share of Disney, 1/8 share of Coca-Cola and 1/20 share of Microsoft. You are able to spread out your investments over several different companies without having to pick them. You simply pick the basket and invest.

Diamonds are not just a girl’s best friend. When you purchase a share of a Diamond, you are buying a fraction of each of the 30 stocks on the Dow Jones Industrial Average. You are investing in them all. Some will go up and some will go down. The hope is that they go up more overall. Diamonds are traded on the American Stock Exchange.

Diamonds are often preferable over Blue Chip mutual funds, due to the lower expense ratio and tax efficiency.

A HOLDR will allow you to invest in a certain sector, instead of the individual companies. They are traded on the American Stock Exchange. If you expect bio-tech to go sky-high this year, you may want to invest in the entire sector instead of one or two companies. This spreads the individual stock risk out over the sector.

HOLDRs are more focused than most mutual funds. However, you must purchase them in lots comprised of 100 units. For example, if the current price is $125, you will need to purchase $12,500 worth. You will be eligible for all of the services and benefits of those that purchase the individual stocks — including dividends, annual reports and shareholder perks.

SPDRs, a.k.a. "spiders," are also traded on the American Stock Exchange. It stands for "Standard and Poor’s Depository Receipt." They trade at 1/10 of the value of the S&P 500. As the S&P goes up, they go up. As it goes down, they go down. Dividends are paid to SPDR owners every quarter.

There are many ways to diversify your investments. Diversification is a great way to mitigate your risk in the stock market. Many investors do not have time to sit and evaluate the individual companies. Blue Chip Baskets, diamonds, HOLDRs and SPDRs are the result of the demand by average investors for a simplified way to spread their investments through basket investing, instead of through mutual funds. New products are always on the rise in the financial arena. Shop around when looking at both stocks and other options for investment.

Martin Lukac http://www.MartinLukac.com , represents http://www.RateEmpire.com , an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com

When it comes to finding excellent stocks that have a high potential for making very large moves I have a system that I use to select from. To find the information that I need, I use the Bigcharts service by MarketWatch (www.Bigcharts.com). I go to the section called "Big Reports". I go to the section for largest percentage increase in volume. This displays for me a mosaic of stock charts on both the Canada and US markets, for all major stock indices. Once a week I browse through the charts for all five of the last trading days. What I am specifically looking for are not only stocks that appear to be trending upward, to show a marked increase over its normal trading volume. When I find a good prospect I click on the mosaic icon to open up its full size chart. The first thing I look for is a stock that’s trading at or near its all-time high. This is because I wished to eliminate those day-in, day-out moves that in the scope of things are really meaningless. However, if the stock is continuing to make you highest with large increases in volume it is probably something significant.

Once I have located this prospect, I detailed a little deeper into the particulars of stock. By clicking on the "printer friendly format" of the chart screen I can see at a glance all of the stock and company particulars. While not a hard and fast rule I have found that the stocks with the most potential to make an explosive up move part of those that have less than 25 million shares outstanding, and the capitalization of less than $750 million. I will, however, deviate from this guideline if I feel a strong enough volume increased/stock movement warrants this.

My goal is to collect a printout of the very best stocks that meet these criteria, which I can print out and post on my corkboard. It is from this list (which I then follow each week) that I pick the best one or two stocks from the group.

This method gives me a very reasonable chance at finding a explosive high potential stocks. It is, of course, not foolproof. Even when I find what I am sure will be a sure thing winner, I always use stop losses, and never risk more than 2% of my total portfolio on any position. I can always find new winners, so I am not afraid of letting trades pass. However, decimating my account by a careless position will not allow me to trade tomorrow.

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Kevin J. Mulholland has been a computer instructor and consultant for more than 16 years near Toronto, Canada, where he lives with his wife and son. He continues to share his professional expertise through many forums. His information sites include:
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The Best Swing Trading Indicator
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When there is volatility in the market or on a stock you are familiar with, long straddles can be a winning options strategy.

The concept behind this uses the basic rights of a call option and a put option on the same stock. As long as the market on the stock rises or falls enough to cover the cost (premiums), then the long straddle will be a profitable options strategy for you. There is also limited risk with long straddle positions. The most an investor can lose are the combined premiums spent.

To understand this strategy, it is best to describe the contracts themselves. A long straddle is made up of 2 types of options - Calls and Puts. A call option gives the holder (buyer) the right to buy the stock at the strike price. If the market rises, the call will be profitable or "in the money". When an options investor owns a call, he has an unlimited gain. If the stock declines, the contract could expire worthless. A put gives the holder the right to sell the security at the strike price. When the market on the stock goes down, the put will gain in value. If the market goes up, the put will expire worthless and the trader would lose his entire premium.

Long straddles take advantage of each type of option and uses them together. The aim then is to see if a stock can move enough or have wide trading fluctuations or a wide trading range which allows the straddle to flourish.

Stocks to use

The best candidates (stocks) for long straddle strategies are securities that you are familiar with. Perhaps you own a stock that over-reacts to bad news, good news, earnings announcements or has a wide trading range that it bounces off of. The thought process of a long straddle purchase is you are not gambling on the stock going only up or only down. You are anticipating movement, but you are unsure of that direction. If a trader thinks the stock is going up, then he should only buy call options. Long straddles cost more because of the premiums paid for 2 contracts. You can buy more than 2 of course, but you are buying options on each side of the market.

Long Straddle Example

Buy 1 WEL Jul 40 Call@4 ($400) Buy 1 WEL Jul 40 Put@3 ($300)

These option contracts cost the investor $700. The straddle is long, because the investor bought them both. Regardless of what happens with the stock itself, a premium cost of $700 must be made up. The trader needs WEL stock to rise 7 points (47) for the call to be profitable enough to exercise or trade or for the market to decline 7 points (33) for the put to be profitable. 33 and 47 are the 2 break even points on this long straddle. Any point above or below those 2 levels will make this investor $100 on the straddle (based on one contracts each).

The most the investor can lose is the $700 premium cost.

Long straddles carry large or unlimited profit gains, but as with all options strategies - gain potential is offset with the possible loss of the initial investment. Play the stocks you know and look at the trading range. Experience with the stock itself is key and can be your ticket to big money in long straddles.

More information on all straddles

Happy Trading!

Nick Hunter is the President of American Investment Training. Their website http://www.aitraining.com offers investors and brokers with education courses, investment information and a free financial glossary look-up.

The most widely traded ETFs & the leveraged ETFs:

I know a lot about leverages since I started my trading career as a forex trader - the highest leveraged market I can think of. You can use 99% margin that means if you are right, you get a lot of money for what you put up. On the other hand, imagine if you were big time wrong and heavily out-of-the-pocket. Ouch! It’s always good to make use of available tools as long as you calculate the risk portion of the risk/reward ratio. Money management is one of the most important keys to successful trading.

Due to the popularity of ETFs which topped $400 billion in November, a lot of new ETFs have come into the market with a lot of dressings of course. The more choices, the merrier but just like financial planning or going to a tailor, one style can’t be suited for all. So assess what you are looking for and look at the pros and cons. Like most things in life, the rigid guidelines of how our society labels what’s right or wrong just won’t do for all.

To invest/trade the broader markets:

You have the fairly sophisticated ETFs that have been around for the longest: SPY, DIA, QQQ, MDY, IWM perhaps "sophisticated" is the wrong word for ETFs but well suited here for description sake. They are the widely traded, less spread and most active. I like these features and trade a lot of these ETFs.

To short a particular market or sector:

you can short the ETFs directly. You need a margin account to go short because you are borrowing the ETFs from someone else within the brokerage firm.

If you were shorting the above 4 ETFs or ETFs that are widely traded:

pros I can think of for shorting the above ETFs:

- small bid & ask spread: they are the widely traded ETFs so they offer small bid & ask spreads.

- fast execution - because of high turnover & high liquidity.

- pre-market & after-market trading.

- no uptick rule - unlike individual stocks which prevent selling short a stock that is on a down tick. Also means faster execution. The no uptick rule applies to all ETFs.

Cons:

- they could run out of stock - I classify it as a "con" because I am assuming that you are going to short it with determination but the fact is: if you are with a major brokerage firm and you are faced with a out of stock, highly traded ETF. Perhaps it’s an indication that the herds are all shorting so withdraw your order could be an appropriate thinking.

- you are paying interest - because you are borrowing the underlying ETF to go short. No free lunch here. It’s probably not a significant factor for most short-term traders but for the longer term holding or trades.. it could be hefty dues.

Your alternatives are of course being well thought of by the ingenious companies that come out of all sorts of ETFs. You can buy/long the ETFs below in order to have a short exposure on a particular market.

SH, DOG, PSQ, MYY: So you can short the S&P 500, Dow, Nasdaq 100 and Midcap400 using these ETFs. Basically you can swap the pros and cons above.

pros I can think of:

- you don’t have to borrow the ETF and be confronted with missing the chance to short.

- you don’t have to pay interest going short.

- your risk is limited.. as you know or don’t know that shorting could be hairy..especially with individual stocks. For example: you are shorting a XYZ company priced at $6 it was bought out Giant Grande ABC & overnight it gapped up to $ 23.. does it happen? It does. So for me the careful gambler or trader, I don’t short anything that is not big cap. If you want to bet against something that can lose your shirt use options. That way, your risk is limited. I am not an expert in options and won’t go into details here.

Cons:

- bigger spread. Not as widely traded as yet.

- lower turnover implies slower trade execution especially for bigger orders.

- trading is mainly restricted to regular trading hours due to lower turnover & less liquidity. Sometimes they don’t start trading until 10-15 minutes after the open. It will change as volume picks up.

Leveraged ETFs:

If you want to double your exposure going long: new ETFs just came out in the summer introduced by Proshares:

SSO, DDM, QLD, MVV

SSO = 2x long the S&P 500;
DDM = 2x long the Dow;
QLD = 2x long the Nasdaq 100;
MVV = 2x long the S&P Midcap

Leveraged short ETFs:
To double your exposure on the short side using leveraged ETFs:

SDS, DXD, QID, MZZ

SDS = 2x short the S&P 500;
DXD = 2x short the Dow;
QID = 2x short the Nasdaq 100;
MZz = 2x short the S&P Midcap

The pros and cons for the leveraged funds are pretty much like the ones mentioned above for the unleveraged short ETFs: SH,DOG,PSQ,MYY

I do a regular market analysis at my website: http://www.stocktradinginsights.com

Cheers!

Henrietta does daily updates of the stock market using technical analysis at her website: http://www.stocktradinginsights.com