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Trading
Stocks vs. Investing With Stocks
Stocks market
investors are different from stock market
traders. Stock investors take a long term view
of every company they invest in. Long term
investors want to see their money grow over
time. That time frame may be five years or more
before they would consider selling their stock
for a profit.
Stock traders,
on the other hand, are not investors. A
stock trader looks to make a predictable
return on their money as soon as possible. The
key word here is predictable. Traders
look for patterns in the way a stock moves on a
daily, weekly, or monthly basis. No matter how
you look at it, stock trading and/or investing
involves risk.
One stock
trading strategy that works well in the short
term is selling call options on stocks.
Earning Money
Trading Stocks
Earning money
trading stocks is just like buying and selling
any other investment. In essence trading stock
is very simple. A trader’s job is to buy low,
sell high and then calculate the rate of return.
Let’s say that
you bought twenty shares of Apple Computer at
$50 per share. Two months later you then sold
those same shares at $55 dollars. What would
your rate of return be?
Twenty Shares of
Apple Computer bought at $50 equals $1,000
You then sold
your shares at $55 for $1,100
You would have
sold for a 10% profit.
Congratulations.
You just made 10% on your first trade.
In the stock market this kind of trade with this
kind of return is common.
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