Owning stock is the most basic form of investing and even if you don’t stocks directly, you probably own some through a mutual fund or retirement plan. Owning a share of stock essentially makes you one of many owners in a company’s business. When the stock rises, you make money. When it falls, you lose money (unless you’ve sold the shares short). It’s that easy and the simplicity of stock ownership has made it the investment option of choice for millions of investors. ETFs take stock ownership a step further. Considered a twist on investing in mutual funds, ETFs give investors exposure to a group of stocks in a specific sector or index. That’s a feature many investors love about mutual funds, but ETFs are much more liquid, trading like shares of stock. ETFs are great for investors that want to make long or short bets on a particular sector, but don’t want to pick just one or two stocks. The bottom line is investors should have both stocks and ETFs in their portfolios. Another advantage of ETFs is there are hundreds of ETFs designed to give investors short exposure without directly shorting a single stock, so ETFs can act as a great hedging tool in your portfolio.

There are certainly advantages (and pitfalls) of using investment choices that thrive on leverage. Futures, forex and options all fit the bill when it comes to using leverage. As leverage pertains to options, investors can control a good chunk of a company’s stock for the life of an options contract without the expense of buying the shares directly. For example, you might be able to buy a call option on Coke for $1 a share and that would equal $100 (100 shares per contract x $1 = $100) when the stock is trading for $50. Best of all, access to leverage with the most basic options strategies limits risk. When buying a put or call contract, the biggest loss you can sustain is the cost of the contract, but stock ownership (or a short sale) increases our risk profile dramatically. Don’t forget about leverage with futures and forex. These two trading arenas are home to some of the biggest potential winners and losers you’ll see in trading and that’s due to leverage. Most forex brokers grant traders 50:1 or 100:1 leverage on their capital deposits. That means if you deposit $10,000 in a forex trading account, you’ll have as much as $500,000 (if not more) to trade with. Remembering that each pip on a standard forex lot is worth $10, you quickly see how big money can be made or lost in a heartbeat in forex trading. Futures instruments trade in a similar fashion to forex and it is important to note that investors can lose more than their initial deposit while trading both futures and forex. Since it is a good idea to have some commodities exposure in your portfolio, we like the use of Emini futures, which come with lower risk, as a way of integrating futures into your investment arsenal.

If you’re a long-term investor, a mix of all of the aforementioned assets might benefit your portfolio. To get futures and forex exposure, consider managed futures or currency ETFs. For active traders, start with stocks and mix in some basic options strategies on the side before working your way up to futures and forex.

I agree up to some point that the Forex Autopilot System may be the best or at least is among the best automated softwares available to the masses for a reasonable price, and probably the best option for a beginner based on four basic reasons:

1) When I first purchased and installed the Forex Forex Autopilot System I was no expert trader, and even so I was able to set it up and put it to work in less than 30 minutes on a paper money account.

2) The creators of this forex software offer online support, which I used once to learn more about some configuration options and I got a quick response to my inquiry.

3) The Forex Autopilot System comes with a money back guarantee, which gave me peace of mind at the time of purchase as I knew I could use it for 8 weeks with no risk at all.

4) This forex software performs with a high level of accuracy and effectiveness, and it goes completely on its own, meaning that it trades and makes money without me doing anything. This is definitely one of the best features.

I currently use two softwares and I have also taken several online trading courses, and it would be only fair to say that the Forex Autopilot System is one of the best performers within my forex toolbox.

This software can and will make you money even if you know nothing about forex trading. With the Forex Autopilot System you can gradually turn a small investment into a small fortune, just make sure you follow all the instructions and take your time to familiarize with the system in order to properly squeeze all its potential.

There are various aspects of Forex trading that one needs to understand, if one wants to gain from them. Currency trading system, Forex trading strategies, Forex trading signals and the Forex alerts are some of the major factors helping the market to gain a considerable profit through trading volumes.

Forex is the largest exchange of foreign currency that is considered as one of the transnational markets frequently rising. There is a possibility for everyone from all across the globe to participate in Forex trading with the help of the omnipresent catalyst – the World Wide Web. The main strategy behind Forex trading is that if there is an increase in the values of currency previously bought as compared to the values of the currencies that are on sale, the trader gains from the trade otherwise he incurs a loss. The Forex trading market is ever fluctuating and there are various aspects that the traders need to understand and keep in mind, if s/he has to gain from the market.

There are various strategies that the trader trading in the foreign exchange must keep in mind. Some of the main strategies are the following:

Keep the above in mind and make your killing in the Forex market.

Most often, one finds that Forex trading strategies are a practiced set of “regulations” to be followed to make sure that the trader earns money. It basically makes use of techniques that time and again have been confirmed to work which allow traders to lessen the risk of losses and does not eliminate the need to make decisions like that of an automated Forex robot. There are a number of methods that the trader can learn, of which the principal objective is for the trader to be able to read the market, analyze charts, make quick and accurate decisions, including calculating the ideal time to exit and enter a trade. A really good currency trading strategy will educate the trader about proper management of money and how to lessen the risk of losing that preliminary investment.

A number of trading experts who have been in the business for quite some time will offer their best strategies for Forex trading, such as video tutorials, e-books, DVD’s or written manuals that contain “insider” information which you need if you wish to trade as if you have been doing it for years. What they are basically doing is giving you “insider knowledge” — to discover how the experts conduct trades and receives big profits, with the use of time honored strategies and techniques, and without making use of automated robots, automated systems, and software.

Some traders who have mastered the trade actually developed Forex trading strategies that suited them well and they now wish to share these with other traders. Make no mistakes; these strategies are definitely the fruits of several years of errors and mistakes made whenever they traded on the Forex market. These trading experts have conducted research that resulted in an ideal strategy to guide amateur and new traders in avoiding the mistakes similar to those they made.

Strategies for Forex trading are available in different forms. As previously mentioned, you may have to buy DVD’s, books, or watch tutorial guides. Several of the available strategies actually give you a more hands-on approach. Using a sample account, charts, software, and other indicators is the most common method of teaching an individual the strategy that they are most interested to learn about. It is also possible to have a trading system that is automated that will help guide you through the entire procedure of entering, beginning, ending and completing a trade. However, these kinds of systems still requires you, in some extent, to use your head but it does away with the meticulous task of needing to look at the market to identify any trading opportunities that has great potential.

You can use up a huge amount of time online to see the wide range of strategies for Forex trading that you can pick from. Set aside ample time to carefully read reviews about all of the different option available so that you can find a couple of strategies that you think will best suit your trading style.

Below are some of the options trading strategies that you may consider.

Popular strategies to trade options include:

Bullish on volatility Bearish on volatility Selling Credit Spreads Bearish strategies Selling Covered Calls Bullish strategies Neutral or non-directional strategies Calendar Straddle Strangles

The above list is in no way an exhaustive list, there are plenty of other strategies that you may employ. The purpose of this article is to just give you a small taste of some of the possibilities. Below I expand on a few.

Selling Credit Spreads – If you are looking for a strategy that does not involve marrying your stock options career, then this is one you could consider. There is nothing worse than following a strategy that requires you to monitor the market for every minute of the trading day. You can complete what is involved with this strategy in around an hour a week and if done correctly you might be able to increase your portfolio by around 10-15 per cent monthly. They are great returns that really put to shame what the banks are offering. To execute this strategy you need to know how to carry out a trend analysis on the market. Of course the scope of this article does not allow me to cover this further. You are best advised to join the mailing list on this site.

Bullish Strategy – If you are expecting the underlying stock of an option to increase then you could go with this strategy. The Bullish options trading strategies are brought into play when you as the trader expects the underlying stock price to increase in value. You need to consider just how high the stock price is likely to go and within what time frame. The most likely strategy choice for a bullish trader is a simple call buying strategy. This is quite popular with beginners. Other bullish strategies include Covered Straddle, Bull Calendar Spread and The Collar.

Complex Strategies – These include such things as iron condors, butterflies, straddles and strangles. Just where do they come up with the names used in strategies for options trading? Strange aren’t they? The ones I have listed here if followed correctly are generally low risk while at the same time being highly likely to be profitable. The disadvantage is that they are expensive, either due to the fact that you are trading expensive options or thanks to high brokerage fees which come about due to the number of trades involved.

You should remember that options are quite versatile trading instruments. With such great flexibility this is where many people get it wrong. They think that the more complicated an option trading strategy is the more successful it can be. In fact it can be quite the opposite. The more complicated the strategy the more open you could be to risk while at the same time limiting profit potential.

As with any strategy you employ with your options trading business and treat it with respect. Don’t trade live until you have given it a good test using a practice account. Only then should you consider running with it using your real money.

When learning how to trade options it is always advisable to only use risk capital when trading with real money. This means only use money that you can afford to lose if you have trades that go against you. There you go that just touches the surface of options trading strategies. Of course you will want to learn more and then select a strategy to trade your options using a test account. From there who knows?

Always remember to not let things get out of hand. If you are learning a new strategy only trade with one contract at a time. If you go overboard you will soon find yourself out of control and headed towards disaster. Options trading is not a race. You have time on your side and you should make the most of it. The market will still be here tomorrow.

But where the does the long term investor fit in? Are there any option trading strategies that the conservative investor can employ to enhance his or her long term returns?

In fact, there are.

Leveraged Investing

There are actually a number of option trading strategies that can be employed by the long term investor. Leveraged Investing is the name I’ve given this approach, and these are the strategies I use myself.

The point of Leveraged Investing is to use options to acquire stock for a discount and then to generate additional returns above and beyond the actual performance of the stock itself.

Here are just two examples:

[Please note: in the interest of simplicity, commissions have been excluded from all examples.]

Example #1 – Writing Covered Calls. Writing covered calls is a popular, and generally conservative, income-producing strategy. A call option gives the holder the right, but not the obligation, to purchase 100 shares of the underlying stock at a certain price (strike price) by a certain date (expiration date).

Conversely, when you write, or sell, a call option on shares that you own, you sell (you receive a premium in the form of cash) someone else the right to purchase your stock at a certain price at or prior to the expiration date. If you own 100 shares of a stock trading at $28/share, you could write a $30 covered call expiring in one month. If the stock closes above $30/share, you’ll be obligated to sell your shares for $30/share. But if the stock closes at or below $30/share, the call option will expire worthless and you’re free to repeat the process. Either way, the premium received is yours to keep.

Writing covered calls is a great way to generate additional income from your investments, but the long term investor must take extra precautions to avoid being called out and forced to sell his or her long term holdings (I call one such precaution, The 1/3 Covered Call Writing Strategy–it basically consists of writing covered calls on only a portion of your portfolio in order to give yourself greater flexibility and protection against sharp moves higher by the stock).

Example #2 – Writing Puts to Acquire Stock at a Discount. A put option, in contrast, gives the holder the right, but not the obligation, to sell 100 shares of the underlying stock at a certain price by a certain date. When you write, or sell, a put, you’re essentially insuring someone else’s shares against a drop below the agreed upon strike price.

Like writing covered calls, writing puts can be a great source of income. In fact, the risk-reward profiles for writing puts and writing covered calls are essentially the same. Whereas call writers may write calls out of the money, at the money, or even in the money (the most conservative approach), put writers will typically write out of the money puts (e.g. writing a put with a $30 strike price on a stock currently trading at $32/share).

But for the long term investor, income is of less importance than the opportunity to buy a stock at a lower price that what it’s currently trading at. Writing an at the money put will greatly improve the likelihood of acquiring the stock, and you’ll also receive the most pure premium.

Example: Suppose you write an at the money put on a stock that you really like. If the stock is trading at $30/share and you write the put at the $30 strike price for, let’s say, $2.50 in premium (or $250 in cash since each option contract represents 100 shares of the underlying stock) you’re setting yourself up for a win-win situation. That’s not to say you can’t lose money on the deal, but look at the two possible scenarios.

Conclusion:

As they say, options involve risk and may not be suitable for everyone. But not all option trading strategies have to be high risk propositions. Some approaches, in fact, may offer substantial benefits for the conservative investor. If you are a long term investor, it may be worth your while to conduct additional research to see if there should be a place in your portfolio for options.