Options trading can be a lucrative way to profit from the stock market, but it’s important to choose the right stocks to trade. In this article, we’ll discuss the best stocks for option trading in 2015, based on factors such as volatility, liquidity, and earnings potential.
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Before we get into the specifics, let’s take a quick look at what options trading is. Options are contracts that give the buyer the right, but not the obligation, to buy or sell shares of a stock at a predetermined price on or before a certain date. This flexibility makes options a powerful tool for investors who want to profit from market fluctuations without having to buy or sell the underlying stocks outright.
Factors to Consider When Choosing Stocks for Option Trading
When choosing stocks for option trading, there are a number of factors to consider, including:
- **Volatility**. Volatility is a measure of how much the price of a stock moves up and down. High-volatility stocks are more likely to generate large price swings, which can lead to big profits for option traders.
- **Liquidity**. Liquidity is a measure of how easily a stock can be bought or sold. High-liquidity stocks are more likely to have tight bid-ask spreads, which can reduce trading costs for option traders.
- **Earnings potential**. Earnings potential is a measure of a stock’s potential for growth. Stocks with strong earnings potential are more likely to increase in value over time, which can lead to big profits for option traders.
Best Stocks for Option Trading in 2015
Based on the factors discussed above, here are some of the best stocks for option trading in 2015:
- **Apple (AAPL)** AAPL is a high-volatility, high-liquidity stock with strong earnings potential. It is one of the most popular stocks for option trading, and it is likely to continue to be a good choice for option traders in 2015.
- **Amazon (AMZN)** AMZN is another high-volatility, high-liquidity stock with strong earnings potential. It is one of the fastest-growing companies in the world, and it is likely to continue to be a good choice for option traders in 2015.
- **Google (GOOG)** GOOG is a high-volatility, high-liquidity stock with strong earnings potential. It is one of the most innovative companies in the world, and it is likely to continue to be a good choice for option traders in 2015.
- **Microsoft (MSFT)** MSFT is a high-volatility, high-liquidity stock with strong earnings potential. It is one of the oldest and most established companies in the world, and it is likely to continue to be a good choice for option traders in 2015.
- **Facebook (FB)** FB is a high-volatility, high-liquidity stock with strong earnings potential. It is one of the most popular social media companies in the world, and it is likely to continue to be a good choice for option traders in 2015.
Tips for Successful Option Trading
In addition to choosing the right stocks, there are a number of other tips that can help you succeed at option trading. Here are a few of the most important ones:
- **Do your research.** Before you start trading options, it is important to do your research and understand how they work. There are a number of resources available online and in libraries that can help you get started.
- **Start small.** When you first start trading options, it is important to start small. This will help you to minimize your risk and to learn the ropes before you start trading with larger amounts of money.
- **Use a stop-loss order.** A stop-loss order is an order to sell a stock if it falls below a certain price. This can help you to protect your profits and to minimize your losses.
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FAQ
Q:
What is option trading?
**A:**
Option trading is a strategy that involves buying or selling contracts that give the buyer the right, but not the obligation, to buy or sell a stock at a predetermined price on or before a certain date.
Q:
What are the benefits of option trading?
**A:**
Option trading can offer a number of benefits, including the ability to profit from market fluctuations without having to buy or sell the underlying stocks outright, the ability to leverage your capital to increase your potential profits, and the ability to hedge against risk.
Q:
What are the risks of option trading?
**A:**
Option trading also comes with a number of risks, including the risk of losing your entire investment, the risk of being assigned to buy or sell the underlying stocks at an unfavorable price, and the risk of margin calls.
Best Stocks For Option Trading 2015
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Conclusion
Option trading can be a lucrative way to profit from the stock market, but it’s important to choose the right stocks to trade. In this article, we’ve discussed some of the best stocks for option trading in 2015, as well as some tips for successful option trading. If you’re interested in learning more about option trading, there are a number of resources available online and in libraries.
