This week we used "The Call Buying Strategy" that is when the stock is expected to increase in value.
Long Call options are a debit strategy, unlike (Selling) Call Options that are a credit strategy.
Long Call Options offer much more potential for dollar gains then writing (Selling) Call Options where our profits are limited to the premium we received for writing the option.
When we buy a Call Option we buy the right to call out the underline security (Stock) at the strike price value that we chose to buy the call option, however we do not have the obligation, we can simply sell out the call option we bought at any time before expiration date.
When we are planning to buy a Call Option we need to be sure that the Stock (Underline Security) we are looking at is a volatile one and with a Pattern ready to explode up.
Timing is crucial, Call Options can lose value fast if the Stock does not move in a fairly passe, when we write (Sell) Options we do not want volatility, we want then to lose their value with time, because we did receive premium for
their TIME, however when we are buying, we do want stocks that are volatile.
An Option calculator is a must when buying Options, we could be buying at Call Option today for 2.50 on XYZ stock trading at 45.00 to only see in a few days the option trading at 2.00 and the XYZ stock trading at 45.50, this means that we bought an over priced Call Option.
1. Make sure the XYZ Stock is volatile.
2. Make sure you have a pattern that is ready to explode up.
3. Make sure the Option you are looking to buy is not over priced
4. Make sure that the correlation of the Delta and the Pattern target will allow you to at least make 100% return.
5. Make sure that you chose an expiration date with more time then the time for the stock pattern to complete.
Now in fairness to current subscribers it wouldn't be fair to give away all our hot picks on the blog, but this is an example of how simple option trading can be. Especially when we are making 250%+ gains in a weeks time! So I will show you one of them.
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John,
I can't begin to express my thanks for your dedication and hard work for your customers. I truely believe that Trending 123 is the premier educational website for traders and is the best deal anywhere. John Lansing in my opinion is the best technical analysist in America, he will teach you and not spoon feed you. He is not a fortune teller but in my short trading career has proven me wrong time and time again. I now listen to all he has to say, follow directions snd read the multiple updates each week. I would recommend Trending 123 to all who want to learn while making money.
Cheers
ASJEFF63
I am really glad I joined Trending 123, I have such a regard for John. Someone with as much talent in trading the market as he does...doesen't have to take the time to be in a chat room every day, he does it because he cares. Case in point...teaching us (me) how to play options when he doesn't have to...he chooses to do so. How many people, that has a subscription service, would make a personal phone call to a member if an option play was sold. I dare say only one...John Lansing! I for one am excited about learning just a little of what he knows and can teach me. My thanks to you John for caring about one little fish in the big ocean.
Gary
