Читать книгу Essential Option Strategies - J. J. Kinahan - Страница 10

What investments have the greatest probability of helping you attain your goals? There's no one single right answer, because every individual and institution is different. It's like asking, what's the best car to buy? It really depends on what you're using it for.

The first step to finding appropriate investments is to outline longer-term goals and objectives. Obviously, we all want to build more wealth, but unless we outline a concise plan, we are unlikely to set money aside each month or invest on a regular basis to achieve our objectives. The best investment choices often depend on a person's age, ambitions, and investment time horizon. For instance, as you will see in later chapters, some options contracts exist for a mere week, while others have lives that span many years. What is your investing time horizon, and how much are you putting away each paycheck?

Five Steps in the Investment Process

1. Set longer-term goals and objectives.

2. Develop a trading plan.

3. Identify investment opportunities.

4. Execute (open) trades.

5. Monitor, adjust, and exit open positions.

After the decision to invest has been made, the next step is to develop a plan. How will you try to reach your goals? Can you trade actively during the trading day, or will your investments be made only once per week or per month? Are you investing for five days, five years or fifty years? How much risk are you willing to take? What financial instruments – stocks, futures, bonds, options, commodities – will take part of the trading plan?

Developing a relationship with a brokerage firm is a key part of the trading plan. A brokerage (or broker-dealer) like my firm, holds customer funds and places buy and sell orders as instructed by you, the client. The first step is to open an account and submit any trading approval request forms. For example, investing in options requires applying for options trading approval from your broker.

While many investors focus on brokerage commissions and fees, there are a number of other things to consider besides price. The primary thing to consider is service. For example, does the firm have people that can answer my questions and help me when needed? Make sure they can help you pursue your trading goals. As you read through the chapters of this book, you will likely find the investments and strategies that match your longer-term goals and trading plan.