When it comes to trading there are some essential things you have to think about. In this article we will discover the 4 most important rules.
Buying And Selling
Never place an order before the day of open trading. It’s best to wait until the opening day to place your orders. Sometimes you end up paying more, sometimes less. There are some who have been quoted a price, before the opening bells. Once the bells rang, the price for buying a specific option went up. Those people had to pay the heavier price. Don’t let this happen to you.
If a price is quoted for you before the opening trade day, wait. Wait to see if it still stays the same. You might not be getting the expected amount. Just be patient. The more you play by these rules, the more you will win big money.
Time Of Day
The best time of day is between 1pm and 3 pm. Why? Everyone is busy at those times. There won’t be such a fury of excitement. You can get in and make your transactions and at a good rates. Besides, the best stock options aren’t given out until that morning. Rule number one in stock trading, don’t be in such a hurry. If you are in a hurry, it will cost you a lot of money.
Bid-Size And Ask-Size
- Always check this out, prior to doing anything.
- If the bid size is bigger then the asking price, this is the sign you need to pay attention to. It’s a sing that you need to make a move and fast. If you don’t someone will snatch it up quickly.
- A good system will tell you the previous price and the current price, as well as the bid. This way you cam make a choice as to what is right for you.
Choose Options That Are Over $10 Per Share
There are two reasons you should choose options selling over $10. If the item is below the $10, the percentage is usually bigger then the bid-ask. Rule number two, you need a bigger price to break even. The other reason is more about the company themselves. Those who only buy and sell options for under $10, are those who are in financial troubles. Basically they are trying to offload everything. Don’t be fooled by this. You will end up losing more money in the end. Stay clear of these stock options. They are nothing but a portal to your own financial issues.