About Day Trading: Using Options and Warrants To Reduce Risk

Day Trading In the Spotlight | More Topics |   from Adam Milton Most long term stock trades have their entire investment at risk (e.g. if $10,000 worth of stock has been purchased, then $10,000 in cash is at risk), but there is a way to reduce the risk, without significantly reducing the potential profit. This week's trading newsletter describes how to trade options (and warrants) as insurance for another trade, and could significantly improve your trading's profit potential. The newseletter includes: - the discussion of trading options and warrants as insurance, - an introduction to warrants for traders who are not familiar with them, - and the weekly economic calendar with volatility expectations. Good trading :-)   In the Spotlight Trading Options and Warrants As Insurance Options can be traded in their own right, or they can be traded as insurance for another trade (e.g. a stock trade). When options are traded as insurance (also known as hedging), they protect the underlying trade by limiting the amount of potential loss. Trading options as insurance can be very useful, but many traders (especially buy and hold traders) do not understand how options insurance works, and therefore do not use it ... find out how to trade options as insurance              More Topics Options Trading Basics Introduction To Warrants Most traders are aware of the options markets (even if they don't know how to trade them), but many are not aware of a similar market that offers all of the advantages of the options markets (e.g. insurance), but without any of the disadvantages (e.g. high premiums), namely warrants ... find out about warrants   Economic Calendar With Volatility There are several news releases from each region this week (US, Europe, and Asia). The US has eight high volatility news releases, while Europe has three high volatility news releases, and Asia has six high volatility news releases. Markets from all three regions will probably experience high volatility and significant price movement throughout this week ... view the economic calendar     Sponsored Links   Best Moves in a Bad Economy Save & Invest the Right Way Find out how to beat a bear market, make smart choices, and keep your cool even when the economy is unpredictable. Day Trading Ads Black Scholes Model Trading Clearing Currency Day Trading Futures Prices Future Option Advertisement     Visit Related About GuideSites: Search About      Sign up for more free newsletters on favorite topics. You are receiving this newsletter because you subscribed to the About Day Trading newsletter as lemmetry@GMAIL.COM. If you wish to change or remove your email address, please visit: http://www.about.com/nl/usgs.htm?nl=daytrading&e=lemmetry@GMAIL.COM About respects your privacy. Our Privacy Policy. Our Contact Information. 249 West 17th Street New York, NY, 10011 © 2008 About, Inc.