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A short sell is the promise to deliver a stock the seller does not possess at the time of sale. You must have access to the stock through a broker who will temporarily lend you the stock. The stocks you short come from many sources as they might be owned by your brokerage firm or by another client.

When the sale transaction is consummated, the proceeds are deposited into your account. Soon or later, you will be required to “close” the short. Closing the short is accomplished by purchasing the identical number of shares and returning them to whomever lent them to you in the first place. At the time of the purchase closing the short, if the price of the shares is less than when you sold it, you have a profit. Short sellers have a loss when the subsequent price has risen above where it was when the stock was shorted.

You need a broker if you are going to try to play with stocks, especially if you want to short sell. In order to use a broker for your stock dealings, you need to open an account with the firm from where the broker is located. If you open an account with cash, money is directly taken from your account to pay for any purchase. If you open a margin account, you do not need to pay for the purchase directly, and can borrow funds from the firm at the time of the transaction. The account is set up as a way to cover your activity.

In order to short sell, you had to borrow stocks to cover the sale. Whatever terms and benefits a stock may earn, belong to the original stockholder. You incur any activity on a stock, such as a split, and you must pay in full what is owed to the broker.

A short selling stock is something that no beginner should try to do as it involves an understanding of the market and an understanding of greater risk. When you short a stock, there is technically no ceiling on the amount of money you can lose. Contrast this with buying a stock where the most you can lose is everything you paid for it but no more. Many also frown on short selling because you are making a bet that a stock will do poorly which is not a productive action.

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Welcome to part two of a video series of six on how to trade options successfully. There is some really good advice in these articles and videos, and if you are seriously interested in becoming a successful options trader, then I highly recommend that you spend one hour of your life watching these videos. You can find them all on You Tube.

Back testing is one of the greatest things that you can ever do as an options trader. Now this task can be rather tedious especially with the software that is offered on the current market. The most popular software out there is Optionvue and the other is Think or Swim, the latter being a brokerage. Now in both of these software packages it takes hours and hours of manual labor to produce back testing results. Recently, San Jose Options has released their new back testing tool called the Options Toolkit. With this software we can turn hours into seconds. If your time is valuable to you, then I would highly recommend this software over anything else on the market. [youtube:eoECCfuaQWU;[link:Option Trading] : Steps to Success;http://www.youtube.com/watch?v=eoECCfuaQWU&feature=related]

For example, it used to take me one hour to back test one year of trading a Condor in the Optionvue software. Using Thinkorswim it’s a little bit faster. Now, in comparison, to do the same job and actually gather more organized data, it takes about 2 seconds to back test one year in the Options Toolkit. It’s really phenomenal.

So while back testing is very important to see how your strategies have played out in the past, another important quality that every successful option trader has to have is experience. Unfortunately, experience only comes with time, but the reason we need this time to pass is because the stock market has many different faces, and as an option trader we need to fully understand the market as deeply as possible.

Paper trading is also a great way to learn how to trade options. Again, you can simply open an account at Think or Swim or almost any of their options broker and get a free paper trading account to practice with. Although it might be difficult, it’s actually very important to paper trade for at least six months to a year. As mentioned before it’s very important to have experience over time, and paper trading is one way to acquire experience without risking any money.

Finally I would like to say that is very important to keep about 25% of your money in cash. This money will be used to make adjustments, to lock in profits and to put on key trades that will make a huge difference in your trading performance at the end of the year. It’s very risky to use up all of your trading capital, so remember to leave plenty of money free if you want to become a good options trader.

To Find Success with Option Trading visit the San Jose Options Course at www.sjoptions.com

So many options, so little time. When you are getting ready to take out a mortgage to buy a home, there are a lot of issues that you have to understand and a lot of decisions you have to make.

Understanding the types of choices you will have to make will make it a lot easier to get the best type of home loan for your circumstances.

ARMs and FRMs are on offer to borrowers today. As the initials would tell you, an FRM is a home loan with a fixed rate and an ARM is a home loan with an adjustable rate.

Even if you have chosen an FRM, you still have a mixture of choices in this kind of mortgage.

In addition, there are variations on different kinds of ARMs. There are lots of types of ARMs in the home loan market.

You may also be offered the choice of an interest rate only mortgage, although these are becoming very rare.

Now you need to choose whether you want to pay points, and if you do, how many? Usually the length of time you plan on staying in your home will influence the decision on points.

A similar decision making process applies to the size of your down payment. There are those who have a lot of money to put down and have to make the choice about whether it is better to use a large portion of it for a deposit, or only some, and invest the rest.

Another choice you may be given is a prepayment clause. You should definitely opt for this if you feel you want to get out of the loan before the end of its term.

What about a lock in rate? Don’t forget that this is a two way street. Lower rates after you have locked mean you will have a higher rate than would have been necessary. There is usually a means to opt out of a lock in rate, but the lender will have a fee for this. Borrowers who either feel rates are going up, or don’t want to be in the business of predicting rates, should take the lock in option.

Before you start to shop for a mortgage, look into all of these choices and have a good idea of which will work the best in your situation. Don’t even think about signing for loan choices that you do not clearly understand.

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