Ways To Make Money In The Stock Market

 There are 3 major ways you can make money in the stock market.  Each of these ways has its advantages and disadvantages.

1.       Buying and Selling Stocks

This is definitely the most popular way to make money.  It involves simply buying a stock either because of some fundamental data or some technical data and selling it later, hopefully for a profit.  You can also turn this around and sell a stock first, then buying it back for a profit later on.

2.       Buying Options

Buying and selling options is like buying and selling stocks on steroids.  As a stock makes a move the option makes a much bigger move.  So if the stock makes a 10% move the option can make a return of several hundreds of percentage. 

Of course because options give you so much leverage they can work against you in a big way.  If you buy a call option on a stock you think will go up and it goes down or stays sideways you can possibly lose the entire investment that you put into it.

Another thing you should know is that options do expire, so they should only be used for the short time.  You can’t buy a call and hold it for the long haul.

3.       Option Spreads

Option spreads occur when you buy and sell multiple different options on 1 stock that allows you to profit in creative ways.  For instance the Bull Put Spread is a bullish spread strategy with a catch.  With this spread the stock does not have to go up for you to make money.

If you sell out of the money the stock could move up, sideways or even down a little and you would still be able to profit from it with a bull put spread.  That makes it a good way to trade with the probabilities on your side.

For more on option spreads visit http://www.stocks-simplified.com/Option_Spreads.html