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  Options Trading Overview & Strategies Options really shine when the markets are volatile. You can use them to leverage the movements of stocks or other tradable assets as they swing both up and down. And right now — with uncertainty rife in economies and governments all over the globe — is a perfect time to play the options game as the markets experience  wild mood swings . But what exactly are options… and how can you use them to your investing advantage? In this primer, we’re going to give you the basic rundown on what options investments are and how to place a very basic trade. Basic Forms of Options Contracts Call Options We call the right to buy a stock a  call option . These are bullish bets — you believe that the price of the underlying asset will rise by a specified time. With these options, money is made when the price of the underlying asset increases in value. Put Options We call the right to sell a stock a  put option , and it’s exactly the opposite...

  How to Do Stock Market Research The hardest part of  investing in stocks  is doing the dirty work – research. Researching a company requires hard work to uncover vital information about a company and using it to determine  which stocks to buy or sell . How to Find Information About a Company Let’s go through a few ways to find critical information about a company: SEC Filings   – Companies have to report to the SEC by law. Searching SEC filings for annual and quarterly reports about a company is an excellent place to start your research. Analyst opinion  – Brokerage firms and research companies provide research reports to investors that summarize the company and explain the opinion of the brokerage or research company towards a particular investment. One well-known research company is MorningStar.  Industry trade magazines  – Virtually every industry has a trade magazine – even pizza companies! Trade magazines are a great way...

How to Invest in Commodities? Just like stocks, commodities are a risky investment. Still, it's a good idea to understand the various markets, whether or not you invest through them. When markets are volatile, like they are now, traders tend to turn to less risky investments like gold. Understand What Commodities Are Like stocks and bonds, commodities are an asset class used in investing.  Where stocks give you a piece of a company and bonds are a form of debt, investing in commodities gives you market exposure to real-world assets like oil, gold, corn, and pork bellies. Commodity Types Commodity investing is commonly broken down into these four main categories: Agriculture:  Agriculture includes crops grown around the world like corn, soybeans, wheat, rice, barley, cocoa, coffee, cotton, and sugar. Energy:  Crude oil, natural gas, and similar products make up the energy category. Livestock:  Cattle, hogs, and meat products like pork bellies. Metals:  This categ...

Bond Market vs. Stock Market: What's the Difference? The Bond Market The bond market is where investors go to trade (buy and sell) debt securities, prominently bonds, which may be issued by corporations or governments. The bond market is also known as the debt or the credit market. Securities sold on the bond market are all various forms of debt. By buying a bond, credit, or debt security, you are lending money for a set period and charging interest—the same way a bank does to its debtors. The bond market provides investors with a steady, albeit nominal, source of regular income. In some cases, such as Treasury bonds issued by the federal government, investors receive biannual interest payments. Many investors choose to hold bonds in their portfolios as a way to save for retirement, for their children's education, or other long-term needs. Investors have a wide range of research and analysis tools to get more information on bonds. Investopedia is one source, breaki...

What is Stock Trading?                            Stock trading refers to the act of  actively selling and buying stocks to try to maximize profit on the market's daily fluctuations . For example, say an airline stock opens the trading day at $56 a share. By 3 pm, it is at $65 a share. Someone who buys $500 worth of that airline stock at the start of the day and then sells it at 3 pm would be a stock trader. Step 1. Decide Which Platform You Want to Buy Stocks With Once you feel that you understand the world of stock trading well enough to put some money into the market, you'll need to decide how you want to buy stocks. There are three main options when it comes to buying stocks: Full-service stock brokers –  This is the most popular way to trade stocks but also the most expensive. Full-service stock brokers are licensed broker-dealers and offer several services, including research, wealth management, and ta...

What Is Paper Trading?   What's holding you back from investing in stocks? Is it because — like many of us — you're scared of “getting it wrong” and losing your hard-earned cash. Stock investing can be a little nerve-wracking at first, but luckily, some brokerages offer a way for you to get the hang of it before putting any real money on the line. This is called   Paper Trading. Paper trading is also sometimes called virtual trading. It involves  practicing placing buy and sell trades without risking a cent.  New traders use this service to fine-tune their stock investing strategy before committing their money to a brokerage account. Paper trading is a type of simulated investing where individuals can test the waters of the market without putting any of their money at risk. Using this service, investors can practice buying and selling stocks. Because it’s all fictitious, paper traders don’t have to worry about losing money, but they also can’t make any money. What Is...