Introduction
Are you looking to make some extra cash in the stock market in 2017? If so, you may want to consider trading options in addition to buying and selling stocks. However, picking the right stocks is crucial for success in option trading.
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What to Look for in a Stock for Option Trading
When choosing stocks for option trading, there are a few key factors to keep in mind:
- Volatility: High volatility means that a stock’s price is moving up and down more than usual. This can be a good thing for option traders because it gives them more opportunities to profit.
- Liquidity: Liquidity refers to how easy it is to buy and sell a stock. High liquidity means that there is a lot of volume in the stock, which makes it easier to get in and out of trades quickly.
- Open Interest: Open interest refers to the number of outstanding options contracts for a given strike price and expiration date. High open interest means that there is a lot of interest in the stock, which can help to make the option market more active.
Top Stocks for Option Trading in 2017
Based on these factors, here are some of the best stocks for option trading in 2017:
- Amazon.com, Inc. (AMZN): Amazon is a leading online retailer with a history of strong growth. The stock is highly volatile, has high liquidity, and has a lot of open interest in its options contracts.
- Apple Inc. (AAPL): Apple is a technology giant that makes the iPhone, iPad, and Mac. The stock is highly volatile, has high liquidity, and has a lot of open interest in its options contracts.
- Intel Corporation (INTC): Intel is a semiconductor company that makes chips for computers and other devices. The stock is less volatile than AMZN or AAPL, but it still has high liquidity and a lot of open interest in its options contracts.
Tips for Trading Options
- Do your research. Before you start trading options, it is important to do your research and understand how they work. This includes learning about the different types of options, the risks involved, and the different strategies that you can use to profit from trading options.
- Start small. When you first start trading options, it is important to start small. This will help you to get a feel for the market and to learn how to manage your risk.
- Use a stop-loss order. A stop-loss order is an order that you place with your broker to sell a stock if it falls below a certain price. This will help you to limit your losses if the stock price moves against you.
- Don’t trade too much. Trading too much can lead to losses. It is important to take breaks and to avoid getting caught up in the excitement of the market.
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Best Stock For Option Trading 2017
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Conclusion
Like with most things, trading has many risks involved, but understanding those risks and learning the proper techniques through research will help to mitigate those risks while maximizing your outcome for success. If you have been wanting to learn how to trade, option trading is a great option, and will prove to be a rewarding one if taken seriously. Let us know if you have any questions, and best of luck in your future trading endeavors!
