Hi Trader

Welcome to Part Two of your free Stock Market Trading Mini Course: “What The Wall Street Hot Shots Won’t Tell You!”

Today we cover: The biggest single mistake you could ever make on the stock market. Whatever you do, MAKE SURE YOU READ THIS! It may just shatter your long held beliefs about making money from the stock market.

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Part Two - Why We Don’t Like Stock.

Trader, please understand, owning stock is risky.

Holding onto a stock can be a very risky strategy. Stock prices can move quickly and substantially to the downside and can catch you out if you’re not careful. In fact the value of a stock can drop to zero! For example, remember Enron?

And whilst stop losses can help protect you, they are not foolproof. So the only way to really limit your risk is to buy a very cheap stock (so that it can’t fall very far). But these are generally poor trading candidates because they are erratic and have low liquidity.

So if you don’t buy cheap stock, owning shares is also quite expensive. You have to outlay thousands of dollars to hold a reasonable amount. And so your involvement in the market may be quite limited.

In addition, stock often doesn’t move all that much. A good trade might give you a 20% return. And this might take several months. Given that some trades are going to go against you, this doesn’t provide a lot of leeway.

And finally, trading stock is limited. Most people are only happy to trade stocks that are moving up. Short selling (selling stocks that you expect to go down) is a risky strategy and is a bit cumbersome. And sideways markets cannot be traded.

So is there a better way?

We believe that trading options is a far better strategy.

What are Options? There are a range of options available. We are only interested in exchange traded options (ETO).

Options are effectively a means of controlling stock for fewer dollars than direct stock ownership. They also allow you to trade markets in all three directions - up, down and sideways. And, despite what you may have heard, their risk is limited.

But best of all they can generate substantial returns!

At first we found the concept of options a little hard to follow.

We’ll give you a brief overview here but please understand it is virtually impossible to explain fully the magnificent benefits of option trading in an email format right here and now.

But please don’t be put off if you don’t completely understand. Our StockMarket Genie course is guaranteed to completely take any mystery or fear out of trading options.

Take it from us, if you do not investigate fully the possibility of safely trading options, you may be passing up a surefire way to fulfill your financial dreams.

Options are known as a derivative. This is because they are derived from the underlying stock.

So options exist only in relation to a particular stock. For example, there are GE options and Dell options. And their values relate to the underlying stock price.

Options only last for a limited time so they are also connected to a particular month. And there are two types of options - calls and puts. We explain in detail what the difference between the two is in our StockMarket Genie tutorials.

For now just realize that we use call options when stock prices are expected to go up and put options are used when we expect prices to go down.

So we might buy a Dell October Call option at a strike price of $32.50. The premium for this might be $2.25.

What does this mean?

It may help if you think of options as a leased product with an expiry date. Now the above Dell option has an expiry date in October and we need to pay $2.25 in rent for that period. So the premium is like rent.

But what have we leased?

Our lease gives us the right to buy Dell shares at $32.50 anytime up until the lease expires in October. So we haven’t actually bought any shares yet. We just have the option to buy them at a fixed price for a limited period of time. And we have done this because we expect Dell to go higher than $32.50.

But we don’t have to buy the shares. And we can on sell the lease (the call option) to someone else, as long as this occurs prior to the October expiry date.

And this is what we recommend.

That you just trade the option rather than exercise it.

In this way you gain the potentail benefit of the option price increase without having to own the shares.

Here are the advantages of trading options instead of stock.

Options have:

1. Leverage - you can profit from a large amount of stock for only small outlay. 2. Limited Risk - When you buy an option you know exactly how much you are risking and it is only a fraction of the cost of the actual share price. Great news I’m sure you will agree? 3. Liquidity - Most options are freely traded and there is always a market to sell to. 4. Potentially Massive Profits - Option prices are extremely volatile and can move very quickly, which when managed well within a sound trading system like StockMarket Genie, can be a powerful wealth creating vehicle.

That’s it for this part two of “What The Wall Street Hot Shots Won’t Tell You!”, I hope you have found something that is of help to you.

If you have anything you want to see covered in this course please don’t hesitate to email us at the address below.

Keep a look out in your inbox for part 3 of this course which covers: The only four techniques you can use to decide what and how to trade on the stock market and… which is the ONLY one you should ever use?

Don’t miss it, we are starting to get into the meat of the matter now.

This free course is brought to you by the StockMarket Genie(TM) Trading System.

“Ordinary People Making Extraordinary Profits!”

Regards David Chandler www.StockMarketGenie.com/course support@stockmarketgenie.com

PS Just a reminder about the special offer available to you here: www.StockMarketGenie.com/insiders But get there fast because I am not sure how long the offer will be around.

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Rem ember, we are not providing you with financial advice. We are simply sharing with you what has and hasn’t worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.

Regards

David Chandler StockMarket Genie StockMarket Genie 43 May Road Torbay AUSTRALIA 6330