John Bradford

Let's say you have a covered call on AAPL. Your short call is a Dec 400. As Dec 17 gets closer, the price of that short call will fall... eventually getting to zero when it expires. Let's say it's Wednesday Dec 14, and the option is worth $.15. The most you can make by holding that option is $15 more. If AAPL for some reason gaps up $20 the next day, you could make $2000. So the benefit you would get ($15) is hardly worth the benefit you would lose ($2000) even though it is unlikely. So the risk/reward of holding an option to expiration isn't great. Another way to look at it. The short call option provides downside protection. If I sell a call option on AAPL, for $10, I am gaining some downside protection. If AAPL falls $10, I'm at break even. However, if I wait till the call option has decayed to $.15, then I am protected to the downside by $.15. Big Deal. It's not worth having essentially no downside protection and limiting my upside. Again... close those expiring options several days early, perhaps a week early if they have lost most of their value. John

I wouldn't jump into Forex at the beginning. I would trade stock first, then options, then forex, and only go to the next step when I was comfortable and profitable. Candle stick refers to a method of drawing stock charts. Go to finance.yahoo.com and pick a stock and click on Basic Tech Analysis in the left hand column. You'll see a selection where you can pick how you want to draw the chart... Line : Bar : Candle. Select candle and you can see what it looks like. There are advantages to looking at a stock chart in candles over line or bar charts. Do a google on stock market candles or something like that to see what candles are all about. So I think the steps for you are: 1. Read Rule #1 by Phil Town and The Little Book that Beats the Market by Joel Greenblatt. That will give you the basics of Fundamental analysis. 2. Pick 5 companies that you want to follow and read the news on them at least weekly. You can get more than enough info at finance.yahoo.com 3. Spend an afternoon at the library reading books on Fundamental Analysis and Technical Analysis. It's a long road; there's no shortcut. John

If you go to CBOE.com and look at the Tools Tab, you'll find 3 paper trading platforms to choose from. In addition, most brokerage platforms allow paper trading as well, so you have many choices. I would shop a little bit and settle on a broker that you will use for real trading in the future. If that excludes thinkorswim (my fav) because you're in UK, then so be it. I've used Options Express and think highly of it. Trade Monster gets lots of good marks. If you are just doing stock swing trading then complex options aren't a factor in choosing the platform. So pick something you're comfortable with longer term. Any broker can do swing trading. I'm personally not a fan of parallels or vmware, and there are plenty of native mac choices, so I would choose one of those. If you do want to use a Windows emulator, invest a few bucks in more memory; i think that will help your performance and stability. john

I believe that most brokers can do spread trades, you just have to look in the right place. You're right thinkorswim can do it, but it's more obvious there, since they specialize in options and assume that everyone wants to do spread trades. If you go to Schwab, for example, you have to apply for "Options Level 2" to be able to trade option spreads. Once you get that approval, I would recommend downloading their StreetSmart Pro software to trade rather than doing their web site for spreads. I'm sure ETrade can do spreads, but again, you might have to apply for approval to do it and also download their advanced trading platform. OptionsXpress is another one to consider; I've traded spreads with them as well. They assume you'll be doing spreads, so they make it easy. John