Sunday, January 2, 2011

Why Making Money Trading Stocks Has Become Marginalized for Small Cap Investors

Is Stock Picking
Still the Way to Be
Making Money Trading Stocks?
Making money trading stocks these days involves keeping a watchful eye on forex markets and central bank activities. Well funded currency traders and monetary authorities are in a continuous battle to manipulate global markets and economies. It is for this reason investors seek other means of achieving high returns without carrying the risk of being stuck in an illiquid investment.

Trading Stocks to Make Money
Day traders have come to rely on the amped up buying power of options contracts to turn small investments into big money. The key to making big money trading options is by controlling large quantities of stock without having to put up all of the money needed to actually own those shares. One drawback of the options trading market is the vast number of firms holding contracts which ultimately become worthless.

Investors new to options trading quickly find that if they don't invest in blocks large enough, gains get swallowed up by transaction costs. This inefficiency of transactions puts a minimum size of investment made (typically $1000 or more) puts severe limitations on small capital traders trying to maximize their buying power. Day trading robot programs and high frequency trading servers have made profiteering in options trading considerably more difficult than in prior years.

How Small Cap Investors Compete
Trading binary options offers people with little money to trade with the big boys, and likewise forex trading allows enough leverage to make currency trading worthwhile. While forex trading is a little complex for most investors, binary options trading is simple enough that a child could understand the basics.

Binary Options
People familiar with European options trading will be familiar with many of the characteristics of a binary option. The most important difference for people with only a few dollars of capital is that there are no transaction costs associated with taking a position. Because yields on binaries are in the range of 60% and up even a small $200 trade can earn over $100 a day.

See examples of how people are making money trading options. Traders using binary options trading signals see greatly improved returns on investment on their high yield investments.

More Articles on Making Money in the Stock Market:
Cheap Stock Market Trading
Which Trading Signals Service Is Best for Me