The Bull Hunters Guide

I have just completed a 3 day computer workshop on the Gold Coast to learn a few more stock market strategies. Maybe the correct terminology is: Enhancing My Financial Market Education. A few strategies were certainly finetuned and I can now take my trading to a new level with my share trading. In the past I have been stagnating at the same, almost regular, returns every month. Not bad ones, I might add, but I wanted to add some fun to the trading and that objective looks like being fullfilled.

Trading Mentality

The funny thing is, I have met some people over the last few years that have taught me things that “Can’t Be Done”. At least, that’s what’s many others are telling me… Bypassing their skepticism and engaginging my personal right to make up my own mind has given me many gems and life-changing strategies to work with. Now I have a Trading Mentality to use in the global markets, such as the US stock market. One strategy I learned this weekend showed how 60% ROI per annum is very achievable for me. Of course, like anything else, there are no guarantees or advice given. We are all adults and are able to take in financial education and process it with our own intelligence. Notice that I have not mentioned the name of the educator so no-one can take it the wrong way. It’s possibly someone you haven’t heard of before. Who knows?

Bullhunter Guide Part 2

I have been working on 3 books and 2 are nearly complete. The Bullhuntes Guide Part 2 is still underway while the other 2 are mindset books and will be downloadable from my Sean Rasmussen Blog. I will keep you updated on the release of the next BullHunters Guide Ebook as soon as I have it ready. It will ceratinly contain a fair share of trading mentality.

Stay tuned…

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2007

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Hello fellow Bullhunters

This post will be the final excerpt from The Bullhunters Guide to the US Stock Market so I would like to hear your thoughts and what you have learned from this experience. I know for myself that it has been very helpful in understanding the stock market in a bit more depth. Although the ebook is a summary of the goings on of how the stock market works and how a share is valued, this tool is useful for the newbies starting out in the stock market and wanting to develop a trading system that will work for them. So let’s look at Intrinsic Value and Time Value and how that factors in to trading options…


Intrinsic Value and Time Value

Options are valued based on intrinsic value and time value. Intrinsic value is the positive difference between the stock’s current price and the option’s strike price. Since the strike price in the above example (previous post - Trading Options) is higher than the underlying stock, the options have no intrinsic value (intrinsic value cannot be negative). Therefore all $0.10 of the option’s value is time value.

As options get nearer to expiration, their time value erodes. Its like making a bet that you will run a marathon in the next 365 days. By day 100, it is less likely you will do so, but not entirely impossible. By day 364, the odds are you are not going to do it. The same is true of stock options, so as the expiration draws nearer, investors are willing to pay less and less for the time value.

But imagine Microsoft hit $35 a share on December 26. Now the $32.50 calls would have $2.50 of intrinsic value plus some time value. Instead of exercising your options - which would require you to buy 3,500 shares of stock - you could simply sell your option to a market for $250-plus per contract.


Options Go the Other Way Too

In addition to calls, there are also puts. Puts give you the right to sell a stock at a specified price within a specified period of time. This way, you can make money when a stock goes down, without taking on the risk of shorting.

For a real mindbender, you can short a put contract. This means you are selling the right to sell a stock at a certain price within a certain period of time. Confused yet? Don’t worry. In this book, I only want to cover the basics of the stock market. We can talk about derivatives in more detail in another book. Stay posted.

More Bullhunter on the Way

So there it is. The Bullhunters Guide to the US Stock Market first installment. While boring at first glance, following the financial markets can be the most entertaining hobby in the world. Once you understand the basics and begin to dig in, it is like following a sport that has no off-season.

I wouldn’t mind some feedback just to know how you are traveling and how you are getting along with the stock market and whether you are trading. How have we helped you with this blog and the ebook download. The reason I ask is because in order to give you what you want specifically, I need to know what it is.

To Your Success

Angela Recchia
Graduate Support
Universal Wealth Creation © 2004 - 2007

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