Lately, a lot of people have been showing an interest in etf trend trading. But before you decide to try out trading etfs for yourself, it is crucial that you have a strong understanding as to what these funds are and the type of return that you can expect to get off of one of these funds as well.

The term etf is actually a shortened version of the funds full name. The full name for the fund is exchange traded fund. These funds are traded everyday on the stock market in the same manner that you would see stocks traded.

The funds hold assets in the same respects as stocks and bonds are set aside to do. The funds are down through an index, this feature is actually different then with trading stocks.

The funds are highly attractive to anyone who has been looking for an inexpensive way to get involved in the stock market. Many people live the fact that the funds are not only considerably cheaper to buy and start trading but they offer great tax efficiency and they encompass a lot of the same features as stocks.

Etfs offer traders an undivided interest in a pool of different securities. Many people have actually compared these funds to mutual funds because of how they are traded on the market. As many people have a knowledge base that surrounds mutual funds you can probably understand why these funds are becoming so popular.

Etf’s can be bought and sold throughout the day just like many stocks and bonds are purchased. There are a lot of clear reasons why etfs are considered the new age way of investing, however let’s review over some of the most talked about features of the fund to give you a better understanding as to what owning an etf can do for you.

You can purchase an etf for a lot lower than you would for a normal stock or a mutual fund. Most mutual funds require that you put down a large amount. In fact, many of the mutual funds that people are opting to open state that you need to at least have $1500 in the fund at all times.

Etfs can be opened with a hundred dollars or more. Of course, the more money that you consistently keep putting into the fund the larger your return on your investment will turn out to be. People also love the fact that the funds can be bought and sold regardless of the time of day.

There are a lot of benefits to owning an etf. One of course, if the fact that you will be able to add an attractive and new style of investing to your investment portfolio. Your investment portfolio is sure to turn heads once you ass your etf experience to it.

You will always be able to check on the status of your investments and have a clear figure that states the amount that you have in your etf. Many stocks and bonds as well as mutual funds give you a guesstimated figure of how much money you have in your account, while others may not tell you anything about the money that your investment is earning.

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Previously the advantages or the reasons why you should invest in the stock market was discussed. In the first part of this two part series, we discussed about the first three reasons why you should invest in the stock market those are, potential for greater returns, part ownership of the company you are investing and belonging to a special group of people. We continue by discussing the next 4 reasons in part 2 of this 2 part series. Should you wish to view the entire article, check out my blog.

4.) It still one of the best vehicles of investment – Even if the stock market has its up and down moments, investing long term in the stock market will still give you one of the highest returns making it one of the best vehicle of investments ever. Returns in the stock market fluctuate yearly. For example, in 1986 the Philippine stock market recorded the highest return rate at 224 %. On the other hand the lowest rate of return was in 1997 at negative 41 %. However the average return (within 20 years) is still somewhere from 24 % to 28 % per year. This means that the long term investor always wins in the long run.

5.) Helps you become more financially literate and inspires you to increase that knowledge – Investing in the stock market forces you to go over the business news. It also helps you give significant meaning to the major news headlines. News for you is not something to be discussed in chit chats, but rather you view it as something that will have an impact on how the market behaves. You are forced to understand words that are foreign to you. You will become more sharper intellectually as you are motivated to keep on reading. If you dozed off in your your economics class in high school or college, this time you will be pulling your hair apart just to figure out what inflation means. you will be motivated to become a life long student.

6.) Investing in the stock market will help you know what it means to harness the power of the internet – The progress of man is divided into several ages. We had the “stone age” the iron ages, bronze ages etc. then we moved up to the industrial age and now they say that we are in the “information technology age.” In the information technology age, knowledge is power. For many of us that term is considered just an adage. But with online trading you will know what that means. Since I was in college I really wanted to know what it is like to invest in the stock market. I was just amazed when I see traders in movies, shouting buy or sell. But I did not invest back then mainly because of three reasons, lack of information, lack of capability and most of all lack of money.

In today’s internet driven economy, information can be accessed easily through the world wide web.Trading is made much more easier with online trading facilities. As this opportunities are presented to me, I made it a point to start investing in the stock market. Now I do all of my trading activities online such as monitoring the news, buying and selling of stocks and transferring money to my accounts. Perhaps I will someday move into global stock market trading. Despite its complications, the principles in stock market trading is still somewhat the same.

7.) Investing in the Stock Market helps build the nation -This is the most noble objective and advantage as to why you should invest in the stock market. One of the main reasons why companies want to get listed in the stock exchange is that they want to infuse more capital into their business. The reason why they want more capital is they want to expand the business. More capital means more business, more business means more jobs, more jobs means more needs of the average Filipinos are being met. More business also means more taxes for the government. In a sense when you invest money in the stock market you are actually helping create jobs and at the same time more taxes for the government. This increase in economic activity helps build the nation.

Certainly these compelling reasons make a valid argument as to why you should invest in the stock market.

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This is the final part of the series on principles of investment in the stock market. The last seven principles was discussed in the past articles. We will be discussing the last three principles in this article. Visit my blog if you want to see the whole article.

8.) You must devote your time to study – When you want to invest in the stock market you should devote time to study what it’s all about. You can’t just place in your money and hope that it will somehow grow someday. You have to read books and materials on the stock market. When I started investing I dug out materials in the internet related to the stock market especially the Philippine stock market. I bought books on the stock market. The Philippine stock exchange has an “investor’s primer” for those who are new to the stock market. (See the Philippine stock exchange website for more information.)

Attend seminars on stock market investments. There are several brokerage firms that conduct free seminars for newbies in stock market investing. Last year, CITISEC Online did a 2 day free seminar. I took the time to attend that seminar. This brokerage firm is one of the most innovative, active and well managed brokerage in the Philippines. The information you will learn in the seminars is very helpful. Continual study is required if you want to succeed in the stock market. Once you stop learning you stop to succeed.

You should read all the materials and attend all the seminars you can to further expand your knowledge You should not give up when there are terms you could not understand. For example reading this article alone may give you a headache since there are words that you can’t relate to. Words such as “points, “Philippine Stock Exchange Index (PSEi), “Blue Chips” or “Bull run” may sound foreign to you. What is worse is that you don’t even understand what a stock is. It does not matter. I started out not knowing what some of these things are.

Stuff like these are never taught in school. I only learned them by reading and having a hands on experience in trading. I highly suggest that you watch the movie “Pursuit of Happyness” This is a story about one man’s struggle to learn the stock market. Years later he made millions through stock trading. This movie is based on a true story and is sure to inspire you!

9.) You must know your current events – A lot of factors can affect the stock market. You should read the news paper as this may give you a clue on what direction the market may take. More importantly you should read the business news as this may give you an idea as to which stock you should buy. I read the Philippine Daily Inquirer everyday in order to have an idea where the market is headed.

10.) Now is the best day to start – Some people say that experience is the best teacher. I agree, experience is the best way to learn. It does not matter if you start small at first, the most important thing is that you start immediately. Never procrastinate but don’t rush immediately without first studying the basics. When you have already learned the basics of investments, start buying your first stock. The most rewarding thing in your career as a stock market investor is when you have profited from your first sale.

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Forex books are common, but ones that have good information are few. The free books seem to always contradict them self and have repeat information that can be easily found in a search engine. If you are a new trader to forex, relying on a free book to get you to your success is a sure way to fail. They just do not offer the information a trader needs.

Checking out forex books it was clear that the free ones on the internet will not offer you any substantial information or results. For the most part the books had useless information that was merely obvious trading standards that anyone should know that is in forex. This to me seemed a bit sad that people rely on these for information.

There are many forex books that can be purchased as well and I have had my share of them. The ones that you pay for can offer some good information, but again there have been many that were purchased and were no better than the free ones! As for the good information that was in them, it was nothing fabulous that you could not figure out after a few months of trading and would not make you turn more profits.

Common in forex books was the fact that they avoid any kind of structure to their method and lack management of trades. It seemed that I have almost lost hope in any kind of book that had good information. After some deeper searching I discovered this one method that the big traders use and try to keep hidden from the public!

After all the forex books I went through, there just was no other that could even compare to this method I had discovered. This method is what the big traders have used to get their massive dominating trades, and I found out how. After incorporating this one method into my forex trading, in a matter of a week I doubled my trading profits! This method was one that any trader can benefit from, and I have never looked back!

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If you want to day trade forex profitably, then you better have a plan in place before you begin. It doesn’t matter whether you plan on manually trading or by some other means, you just can’t fly by the seat of your pants. You need something that has a good money management approach as well as a competitive edge. Many people are turning to forex robots for their trading needs and finding a winning robot is critical. One such robot that has excelled since it was released is Fapturbo.

Fapturbo integrates right into your Metatrader platform. It was created by 3 veterans in the foreign exchange industry. They started with the super successful FAPS system and took it up a notch. Way up. After a lengthy phase of testing by using actual money, Fapturbo was finally released to the internet day traders.

Fapturbo is an asset to both the short-term and long-term trader. The scalping section of the robot is the key element of this package. It is the part that nearly everyone uses. It utilizes four different currency pairs that you can trade. Consisting of the EUR/CHF, EUR/GBP, GBP/CHF, and USD/CAD pairs.

Fapturbo is one of the easier robots to use. You simply buy the software, then drag the appropriate file into your Metatrader chart. You can then adjust the settings as you see fit and the robot is all set to trade. You can completely modify the trading if you want or run it on the built in settings. If you really plan to day trade forex, you may want to play around with the settings and find the best blend for you.

Before you start to successfully day trade forex with Fapturbo, you should absolutely try it out first on demo. There are many brokers out there who have taken a stand against Fapturbo. It is important that you figure out whether this will be of value for you or not on a demo account first. You always want to test out your strategies on a demo account before you go live with real money.

Another very helpful tool built in is the money management section. In the settings you can change the money management as you see adequate. If you don’t want to lose much, leave the setting alone. If you want to risk a larger portion of your account, knock up the value fittingly. This will help you manage your cash based on a proportion of your account. As your account grows it manages your money and allows the strategy to grow as well.

Built into Fapturbo is a long-term trading approach as well that will permit you to day trade forex with a different method. This isn’t really the most rewarding strategy according to most traders and must be used with carefulness. It has a very high 500 pip stoploss, so it requires a big account to work on.

Overall, Fapturbo has been one of the most successful expert advisors in the industry. It has allowed quite a few traders to day trade forex full time from their kitchen. With Fapturbo, you can simplify the trading process entirely.

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You know, I have more people ask me whether they too can use real estate investing to make money. The truth is that it’s obviously rocket science… ok so it’s not. There is a ton of information available for free online at resources like click here, CRE online or REI club to help you achieve your goals.

One important thing that you should understand is that all businesses work using the same three principles.

1) Buy a product or service at a set price
2) Sell the product or service for more than you purchase it for
3) Achieve this during a measurable period of time

In order to make money real estate investing, there are two basic things you need to clearly understand.

a) How to Buy Real Estate

Real estate almost never sells for a significantly higher price than it costs to purchase it for. That means the first step to making money real estate investing means knowing how to buy property for less than market value. There are techniques that will help you achieve regular consistent results but understand that making money real estate investing is both an art and a science.

The first key towards making money through real estate investing is to learn to buy your equity at the purchase. Later, we will sell that equity and it will produce real tangible cash. Most new investors think that you make money when you sell the real estate. The truth is that your money is always made when you buy.

Believe it or not, most products only have an average profit margin of 8% after you consider all expenses. Some more profitable products have profit margins larger than 30%. Because of the large cost of real estate compared with other products, a thirty percent gross profit margin for the average investor can be more than a lot of people earn in an entire year. Even though you may not do huge volumes, you make up for this with large profits from every deal.

If you understand how to buy a product for less than market values it for and there is some demand for it, you can always produce a profitable business from that venture. Investing in real estate works because there is always a demand for housing.

b) How to Market Real Estate

Marketing is truly 90% of any business. Having your properties sell for full price quickly and often will help you cash out that equity and get paid. Your marketing efforts will make your efforts wortwhile. Believe it or not, most businesses don’t comprehend this valuable lesson because they don’t understand marketing. Comprehending creative marketing will allow you to make any business work.

Consider how apparent it is in this example. Which one of these advertisements is more likely to garner a lot of attention like we require?

123 ABC crescent – 3 Bed/2 Bath

or

Must Sell $1000s Below Market – 3bed/2bath

While it may be obvious, look at the different property advertisements and you’ll notice that few people incorporate proven marketing principles with their ad.

So, can you actually make money from real estate investing?

Yes you definitely can. When you’re working smarter and harder, you can’t fail. The real benefits to learning all this are that the skills required to master real estate investing are completely transferable to all types of business. Mastering how to buy a product with high demand for less than the market value combined with good marketing skills will make you successful in any business. If you want to make money real estate investing, it is imperative that you learn these skills.

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Are you really considering becoming an investor in real estate? Finding useful information can be a huge challenge. When you are taking into consideration real estate investment advice, you’re going to have to watch out for of who you gather your information from. There are all different sources who will give you answers to your FAQ for real estate investors but not all of them are of the same merit.

Don’t be afraid to ask if that person is really using their own RE investment advice to earn their money through real estate. If the truth is “not really,” then you ought to take that advice with a bit of regard.It’s really important that you learn to take your advice from proven investors.

Whose advice should I be be careful of?

Watch out as you’ll observe that many casual friends, members of your family, realtors, brokers and even attorneys can give you a whole lot of misinformation. In all fairness, if they knew all the solutions to what worked and didn’t work in real estate investing, they’d already be using their own advice to become rich. Your mom’s life advice can be brilliant but her real estate advice will not be based on facts. If you could only ask one of them your real estate question, would you ask Donald Trump or your mom for real estate advice? Which of those two do you think would give you better investment advice? My mom is an incredible woman but her real estate advice isn’t something you’d pay money for.

Unsolicited advice is usually worth what you pay for it. Having said that, you’re going to have to find a better source for your investment advice.

The Real Life Investor Tells the Honest FAQ Like It Really Is

Q: Can people actually get rich from investing in real estate?

A: Ahh… Everyone wants to know is real estate investing actually a good way to make money? There’s different people who get incredibly wealthy from buying and selling stocks and some people who even lose money. For those people who don’t succeed, is it that stocks can’t make you rich or that the people using them don’t all have the right knowledge and skills?

It’s ironic everyone is a “self made man,” it’s just only the rich who admit to it. The rich are what they are because they have applied knowledge and skills that work. Studies consistently conclude that over 90% of wealthy persons have become wealthy through real estate. Does it really work? It really works better than any other system of business to generate lots of cash with the right knowledge and skills..

Q: What are the right and wrong techniques?

A: Unfortunately, I can’t give you a “cookie cutter” answer to that question. In the United States, short sales and lease-options are great techniques to get started towards producing strong cash reserves. In other parts of the world with more challenging banking laws, you may need more complete knowledge on how to start private capital funds and other similar business ventures to get around having to have out of pocket cash.

Q: How much money do I need to start?

A: Donald Trump once said that using your own money in real estate is just “lazy.” If you really get how to create a steep discount than the money sources are probably a lot easier than you think. There are always banks, private money partners, hard money lenders and other money sources willing to back a “secure” deal irrespective of income and/or credit. Besides, no matter who you are, eventually your access to capital runs out and so you have to learn how to generate capital in order to build and sustain wealth. Almost no one ever got really well off using only their own money.

The single greatest that most of the world doesn’t get is that having “debt” is not a good thing. It’s impossible to get rich without it. It’s true however that high interest credit cards and consumer debts are bad. However, all businesses use loans and private capital debts that produce more incoming profits than the debt requires them to pay out. That is the only conduit to wealth. There is no limit to the quantity of profitable debts you can afford.

Q: What is the best place to get started?

A: There are tons of free resources online that will teach you the basics you will need to proceed forwards with making money in real estate. I would strongly urge that you simultaneously learn some marketing techniques as you will find that most investors don’t succeed are not because they have a shortage of techniques that work but simply due to their inability to utilize effective marketing. Marketing is 90% of every business. You cannot achieve long lasting financial success in any business without effective marketing.

Q: What is the best geographical area to purchase in?

A: There is another gross misconception that you need to buy property in the right area. Learn to invest your cash in great deals, not great areas. If you’re looking to buy a second property and you want to hold it for a long period of time, then I’d strongly urge you to check out the fundamentals of cash flow course by Matthew David. However, if you know how to purchase real estate investments with significant discounts built right into the buy, you will be not affected by almost any local market conditions. To successfully make money in real estate you need to learn to buy significant equity at the instance of purchase and then sell your equity share. The “best area” to accomplish that is anywhere you can find such a great deal. That’s why all great investors know that making money in real estate occurs when you buy, not when you sell.

Q: What are the best property types to buy?

A: The best types of properties to acquire are much like what are the best areas to buy. The best types of properties to buy are ones that give you significant equity right at closing. That means that you are buying it for much lower than the rest of the local market would buy that real estate for. The best types of properties to buy are the ones that offer the largest discounts with a fixable problem to why they were sold to you for that low. That can be any type of property. A looming foreclosure is a great example of that but it is not the only one.

Q: Should I “flip”/rehab real estate?

A: You’ve most likely seen a lot on TV about this type of investing. There are many people who get rich by fully understanding how to invest in high risk stocks and there are many people who are content getting 4% in a savings account. Most generic ideas that are sold to the public at large yield “slow, steady, gradual, and safe returns.” They may yield some returns but they will not ever achieve wealth.

When you rehab or “flip” a property, you’re actually just exchanging your time for money. Having said that, you do not actually have an unlimited amount of time to fix properties. While you can definitely earn a profit this way, it is almost unheard of for people to become wealthy from “flipping.” I have seen investors who knew not enough about buying with equity put their time and sweat only to walk away not even breaking even with 6 months of labor and time wasted. I would suggest you learn to fix contracts and financing rather than learning how to hammer a nail. The former is much more profitable and it consumes a lot less time.

Q: Where should I get my investment advice from?

A: There are many “gurus” who offer $2500 weekend boot camps and expensive coaching. The bulk of what you will learn is motivation. While motivation is a necessary part of your success, you will probably not get an even return on your investment. The best investment advice is always located at your local real estate investment club’s next networking meeting. There you will find real investors who are using techniques that work. If you don’t waste their time, you will usually get ten to thirty minutes of their time to hit them with detailed questions about how you should focus your efforts. Just be sure to not waste their time.

Q: What is the best real estate course to review?

A: There are many great courses out there varying from $40-5000 that will help you achieve lasting success. Be wary of courses that have endless “up-sells” with expensive boot camps, personal coaching and more detailed courses on the same material. Watch out for hype and seminars. A true real estate course will be a complete guide from start to finish so that you can complete the type of investment you are trying to accomplish without the need for additional courses. A good course will also include a solid money back guarantee if the information is not entirely what you are looking for.

Q: What skills do I require to be a real estate investor?

A: Most new investors are able to grasp the techniques but they do not have enough qualified sellers to use their techniques on. As with any business, you will need to have strong communication skills, good technique knowledge and creative marketing skills. It will take time to learn these skills but the great thing is that you only have to learn them one time to become rich.

Q: How many rentals will give me enough cash flow to retire off of?

A: This is a great question because most people believe that having rental properties is a good thing. Rental properties are for suckers. Instead learn to create real estate mortgages, utilize creative contracts, fully comprehend creative financing or have rental properties managed in bulk. The banks gets rich from your property with very little interaction and hands on management. You can’t become wealthy if you have to do stuff like plunge a toilet or worry about the hot water heater every other night. Learn ways to get around having to commit your personal time and efforts towards managing properties.

For instance, if you purchase a home and your total payments are $1000/month and you rent that home for $1100/month you receive a total positive cash flow of $100/month. You are still liable and you will have to manage any ongoing issues with the property. If you sell that same property under creative financing conditions and you hold paper as a 2nd lender, you can make the same $100/month acting like the bank without any of the hassles. In the latter example you are giving up the equity you build insanely slowly over time but you do not have to manage the home. You will save years of head aches and hassles by using a creative investment agreement instead of actively managing the property. However, if you buy your equity at purchase as suggested on this site, the equity lost over 30 years is almost insignificant.

Q: What if my credit sucks and I don’t have any money?

A: Ok so then you’re majorly screwed… kidding. Isn’t it about time you improved your credit and money anyways? You can start by fixing your credit and then earning some real dough. On the contrarty to all that you may have been told, it has never taken credit or money to make money from real estate.

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When making decisions, investments, we know better to manage our emotions, investing and the use of logical based investment process. And when times get tough, we strive to give our emotions get in the way. When emotionally based investment behavior drives our investment decisions, consider that lose money. Recognizing the investment behavior, which allows you to invest your emotions get in our way, is an important step to keep them at a distance.

Richard Thaler and Cass Sunstein in his book entitled “Nudge: Improving decisions about health, wealth and happiness, we describe some of the emotions that investments tend to get in our way and how we can deal with them. When the market trend from lower left to upper right, you can easily get lost in some of this emotional investment.

Following the herd. It’s easy to go along with the crowd. If it is safe for them, it must be safe for me. Nevertheless, we must pay attention to those signals, which we have little to get something can not be right. This is especially true if our investment process tells us to take precautions. If our analysis tells us to be cautious, despite the fact that the crowd says, to take steps to protect your profits.

If your stocks are those that are discussed at all cocktails, you know, you become part of the herd. This does not mean that you should close these positions; it means you should rethink why you own them, should you keep them, and what is your exit strategy.

False sense of security. When things go well, investors might be lulled into a false sense of security. Markets will continue to grow our portfolios grow with him. We could even take on more risky investments, buying a hot stock market in an attempt to increase our revenues. When profits come Easy, investors tend to think that they know everything, and lose their sense of anxiety. When this happens, it indicates that you are vulnerable to large losses on the market should turn against us.

Whenever you feel this investment behavior, to reconsider their positions on the basis of what you are looking at what is going right and what can go wrong. Be prepared to take action if the positive trends turn against you. Always think that could change the current sound momentum. Few opposite perspective do not hurt.

Reduce risk. The best professional investors are always to focus first on the risk that they acquire. Furthermore, they articulate what they will do to manage this risk. Then they examine the potential return. When things go well, there is a tendency to ignore the risk you incur. After a good long-term action, the risk of reversal increases. If you are unable to formulate an increased risk you assume, it is a sign that you can avoid the growing dangers of your position.

To manage this investment behavior does not cease to do homework. Especially continue to assess the risks of their positions as they grow in value. Always use a strategy to reduce risks, which include selling part of your position after Nice ran. Be assured, your trailing stop where it should be. Consider using covered calls and protective puts when the parameters of risk may be higher. No one went broke selling positions that were profitable.

Forgetting to diversify properly. When we make money on the market and our portfolio grows in value, we strive to congratulate ourselves on the fact that we have a large investor. During our portfolio can become too concentrated in one asset without us even realizing it. This might work, if this asset class is one of the leaders in the market. In the end, the time will come when money will be transferred to other assets, leaving behind you. Worse yet, your portfolio may decline in a hurry.

To manage the investment of emotion, at least quarterly, preferably monthly, to assess how you have become too concentrated in one asset. If it looks like some shares increased significantly, it might be time to take a little bit on the table. Consider the sale of half of each winning position and put money to work in another and the surrounding areas. The other half of your best stock can save Running with Trailing Stop to protect your growing profits. Only now, you’re playing for money at home.

Investing emotion is one of behavior we can control, adhering to its rules. When our emotions get in the way of investment, we tend to make mistakes that will cost us. When things go well, is easy to forget to follow appropriate rules of investing. Take steps to recognize the symptoms, and then return to a proven investment process. Your portfolio will thank you.
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Conventional wisdom tells us to place our money on an investment vehicle we are most familiar with and on investment vehicle we can benefit most. Since understanding the rise and fall of stocks is much easier than knowing the basics of options trading, it is a more popular choice for the many. But the fact is options trading provide several advantages than any other investment vehicles, including the stock market or even the Forex. Let us look at some:

Leverage

Buying a call option gives the investor a good option position that is similar to stock position. For example, if an investor would by 300 stocks selling at $50 per share, he would have to pay $15,000. But if he would choose to purchase three $20 calls (each contract representing 100 lots or shares), he will only have to pay $6,000 (3 contracts X 100 shares/contract X $20 market price). The investor would then have an extra $9,000 to spend or invest on his or her discretion. The process is obviously not as simple as that. The investor would have to know which call to buy to have a good option position, similar to stock position. However, if you are looking for a good investment without risking large sum of money at once, option trading is the better choice.

Limited Risk

Investment is said to be for the risk takers. This is good if your risk automatically yields to profit. But that is not always the case. In options trading, however, you can have unlimited profit potential and at the same time have limited risk. This is because options trading only give you the right to buy or sell underlying asset, and not the obligation. Meaning, if the price is not right at the end of the contract, you can just ignore and let the contract expire. If, however, you can profit for the change in shares prices, you can assert your right and pursue the contract.

For example, you buy a certain call option for $20 (strike price) that will end on the third Friday of March. On the expiry date, shares you bought are trading at $25. Definitely, you can instantly earn $5 per share and would have to pursue with the contract.

What if the at the expiry date is lower than the strike price?

Let us imagine that the shares you have bought went down to $15 or even $5 at the end of the contract, do you have to pursue the contract? No!

You just have to let the contract expire.

What have you lost then?

The option premium you paid the seller. Nothing more.

Unlimited Profit Potential

Say a certain call option you have bought is now trading at $38 per share. You can exercise your right to buy it for the strike price of $20 and earn $18 minus the Option Premium you have paid. This is just an example. The price of shares can go higher than that. And if you have carefully chosen your call, you can get the best profit without breaking your bank. Note: if you are planning to pursue the contract and buy the shares, remember that you have to pay the full amount. So at the expiry date, make sure that you have you the cash.

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If you are fifty years old or older, you may remember the slide rule and pencil in math class; if you are younger than that, you probably had the advantage of being able to use a calculator in your high school courses. Either way, the results are what mattered, and when you use investment growth calculators, the results matter even more than they did in Algebra.

That is because investment growth calculators are tools that do better than tell you the value of some arbitrary X. Investment growth calculators show you, in very real terms, and usually with pretty graphs, charts, or tables, how your investment dollars will multiply under certain conditions.

Basically, although they cannot determine the actual performance of, say, stocks, for example (now that would really be an amazing tool!), they can provide you valuable information about how your finances may grow with certain assumptions.

Letís say, for example, that you are now thirty-five years old. You think the government is crazy when it says that seventy is considered retirement age, and you want to be able to grab the golf clubs and the suitcase while you are still young enough to enjoy the greens and leisurely travel to foreign lands. You want to kiss your career goodbye the minute you hit the big 6-0, but you have no idea if that is really possible or not. Well, you can play around with the various fields of investment growth calculators to discover how much you need to invest, what return you need to get, and how many years you need to invest to reach that retirement goal.

If your kids are now toddlers and your goal is to put them through college in fifteen years, do you know what you have to do to be able to get them that coveted degree without flipping burgers while they study? Advisors can show you some guidelines using investment growth calculators.

One thing you must remember is that the answers you get from this tool are only as good as the information you program into them. If you are your advisor put in incorrect information or exaggerated figures youíre asking for major problems with your investments. Therefore always double check the information to ensure its accuracy.

With investment growth calculators, you can change various fields and see how those changes would affect your investment income. You can change the number of years you would like to (or are able to) invest, the rate of return (expected, of course, not guaranteed!), your initial balance, and even your tax rate. Although hypothetical in nature, investment growth calculators are a valuable tool when deciding your investment plan.

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