Options Trading can be intimidating for beginners and that is the reason why focus is on understanding the science behind choosing the right stock. Expertise takes a long time to develop. Until then , just follow the guidelines provided here at WTM trading , where we have done the homework for you until you get accustomed to so many other aspects of the trades themselves.
There is no substitute for understanding the fundamentals but at the same time it is easy to get so lost in the vast array of details that we lose sight of our goal. Same goes with the charts available to gather any trend information about a specific stock. Here are a few criteria we suggest , while making a selection.
Since we are beginners , we should make sure that the stock is of a good standing which is indicated by its market cap , number of outstanding shares in the market , the average daily volume of shared being traded. Also check it is 52 week high and lows to get an idea as to where is the stock trading now when compared to its 52 week high and low. If it is a dividend paying stock , it is all the more preferable. But since we are dealing in options , our intention is not to buy and hold stock for its dividend payments. That is an altogether a different strategy.
We will go into further details soon. In the meantime , please post any specific concerns that anyone may have.
