SOURCE: InvestorPlace

April 08, 2011 12:44 ET

Maximizing Your "Options" in 2011

InvestorPlace's Options Trading News Analysts & Experts Offer Information for Those New to Options

ROCKVILLE, MD--(Marketwire - Apr 8, 2011) - With the first quarter of 2011 behind us, some investors are changing their course, while others are just now kicking their investment plans into high gear. And although it's difficult to say what the rest of the year will bring for investors, at InvestorPlace.com, a leading financial news and investing site, our options trading articles all indicate that it's a critical time to remain agile and trade the trends as they unfold.

The best way to do that is with options. Not only do they allow investors to leverage a stock's move while tying up significantly less capital, but when buying straight puts or calls, investors can only lose what they put in, thus reducing their risk.

To help those new to options trading make the most of their investments through the end of the year, we went to our options trading news analysts and experts to uncover some rules you need to know before buying your first option. Some of their top tips for making the most of your investments include:

  • If you trade shares of an individual stock or ETF, always know when the stock goes ex-dividend and the value of the dividend.
  • If the stock pays a dividend during the lifetime of the option, either exit the trade prior to the ex-dividend date or have a plan in place that prevents paying the dividend -- if there are no benefits from doing so.
  • Know when to give up on a trade… and never allow a small loss to grow into the largest possible loss.
  • Invest in options that respond well to the underlying stock's movement.
  • Buy enough time to capitalize on major moves.

To explore our Options Trading 101 guide, or to read the latest options trading articles, news and investment tips before trading options yourself, visit http://www.investorplace.com/options-trading/.

About InvestorPlace.com
InvestorPlace.com is a leading financial news and investing site, providing millions of individual investors with access to free stock picks, options trades, market news, investment research and sharp, actionable commentary. Thanks to a suite of expert advisors, InvestorPlace.com publishes insightful articles on every corner of the market -- from mutual funds and ETFs to options and active stock trading.

InvestorPlace Media is privately owned by Avista Capital Partners, with offices in Rockville, MD, just outside Washington, D.C.

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