Risk and Stock Trading Costs : The 2 Barriers to triumph over if you'd like A Successful Trading Career.

Identifying which way a stock is probably going to go is the challenge.

To get a straddle you by the At / Near-the-money Call and the At / Near-the-money Put option.

To profit from using this plan, you'd need the premium on one of your options to rise by more than both the Call and Put premiums put together.

TIP : One way that I have profited using this methodology is to follow firms that have outstanding press releases with the FDA ( particulary drug stocks ) and get a straddle the day before statement is expected to be made. Click link If youd like stories about day trading school. If the statement is good and the stock rises strongly my call options will rise strongly and I can still profit, though my put options will be pointless. If the statement is bad and the stock falls strongly my put options will rise strongly and I can still profit, though my call options will be pointless. However, there is one significant thing to take into account here and that is Implied Volatility. As a buyer of options and especially At / close to the money straddles we want to be wary of this because if the underlying stock not move strongly in either direction after we buy the straddle, this Implied Volatility can fall or let down and thus wear away the value of our options. All that it takes is some planning and making good selections. Maxing out your visa cards is a quick and simple technique to get money, but the effects can be desolating. One of the best methods to learn trading is to start on a part time basis. This enables you to improve your abilities while you still have takings stream. This could be an indication that implied volatility is on the rise, that may support the premium of our options and even increase their value, without the underlying stock needing to move noticeably.