Taking Stock: Options Markets & Executing a Trade

Classes: Options Markets & Executing a Trade

Back in the day, I briefly worked in downtown NYC. Sometimes I would wander around Wall Street during my lunch break and check out the latest fashion for floor brokers. Gold, green, and red loose-fitting jackets…fancy fancy. Fashion aside, the math-y part of my brain was intrigued by all of the trading happening nearby. This exchange seemed like an intense game.

Now anyone with a computer and a funded account can access the market from their kitchen table. If you’re venturing in, get ready for numbers, money, technology, research, planning, and decision-making.

The Basic Objectives:  1. Minimize risk to capital. 2. Make that capital grow in value.

In the first class, our instructor, Brian, gave an overview of investment and trading strategies. He showed how to use tools to research a company’s business and market performance and then put together a trading plan to buy or sell stocks and options. Options can be a really useful tool for Basic Objectives 1 & 2, but it can take some time to get to a comfort level with calls, puts, and the Greeks — Delta, Theta, Gamma, Vega, and Rho. (Sorority sisters, represent!)

In the second class, we got into the logistics of planning and placing trades in an online account. The classic first trade is the simple process of buying and then later selling a stock. However, if you’re not an attentive trader, an automated conditional plan can help achieve a balance between Basic Objectives 1 & 2. Contingent orders, limits, trailing stops — these are all tools to help keep your plan on track.

Side note: I’m headed to New York this week and plan to report back on the latest NYSE style trends. I bet you’re all just dying to know who wore it best.

(Image courtesy of Jeff Clark Studio)