By Aaron CC Sim and Mirriam MacWilliams

Options trading can be quite a daunting subject, especially if you are a beginner to it without any or much knowledge about doing investing, or do not understand the financial markets.

While all types of investments bring with them certain degree of risks, they can also be good opportunities to make money if you are armed with the right strategies and mindset of a successful investor.

One such investment instrument is the buying and selling of options, commonly known as options trading. This article is written to help beginners to better understand what it is all about.

Many beginners new to the financial market will often ask: "What is an option?"

An option is actually a contract giving the buyer the right, but not the obligation, to buy or sell an underlying asset (a stock or index) at a specific price on or before a certain date. It is a security, just like a stock or bond, and it constitutes a binding contract with strictly defined terms and properties.

There are only two kinds of options and they are:

Call Options and Put Options

A Call Option is a contract that gives the owner the right, but not the obligation to buy shares of a stock at a specified price (also known as strike price) on or before the date of expiration.

A Put Option is a contract that gives the owner the right to sell a specified number of shares of a stock at a specified price (strike price) on or before a certain date.

The amount paid for an option is known as the premium. The premium can be further broken down into intrinsic value and time value.

The Strike (Exercise) price is the price at which the underlying security can be bought or sold as specified in the option contract. The strike price also helps to identify whether an option is In-the-Money, At-the-Money, or Out-of-the-Money when compared to the price of the underlying security.

I will explain more about the terms In-the-Money, At-the-Money, or Out-of-the-Money are in my options trading course.

About Wealth Mentors:
Aaron Sim is the CEO of Wealth Mentors. Aaron let go of a 6-figure job as Finance Director of Unisys Singapore to start his coaching and training business. In just 4 years, his business has gone from zero to a successful S$10 million operation. Aaron is Mirriam MacWilliam's first protege in Asia and is now a successful options trader. He is a CPA by training and has been featured in the Sunday Times, Star, The Standard and Shang Hai magazine.

Mirriam MacWilliams is a self-made millionaire. She is a well-respected options trader and takes pride in helping people make money from trading options. She is also the former National Director of Education of the largest non-profit investment club in US and the Chief Options Trainer of Wealth Mentors. Mirriam has developed a step by step options trading course that has been time-tested and proven to help you consistently generate massive profits using options trading, even if you are a complete newbie. You can click this http://www.usoptionstrading.com to learn more about options trading.

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Everyone has a different personality. So it makes sense that everyone has a different stock trading personality. Some people trade very aggressively and like to go after the short term movements. Some people are less aggressive and like to ride the longer term trends.

Finding your trading style is very important. If you try to be too aggressive and your personality isn't the same you might get too stressed out to make good decisions. On the other hand if you are very aggressive and are trying to trade long term trends you could end up getting bored with the market and stop trading all together.

Trading on the same ground as your personality will help you want to stay in the market and learn from your mistakes. And learning from your mistakes is the only way to succeed in the stock market.

When you are developing your own strategy there are a few questions you should ask yourself.

1. What time frame do I want to trade? Are you willing to sit by your computer for an hour a day placing trades and exiting them? Do you want to ride a stocks trend for several months? Do you want to just buy strong companies and not have to worry about it again for 20 or 30 years?

2. What do you want to trade? There are stocks, ETFs, currencies, and commodities. Do you want to specialize in 1 area or spread out into different areas?

3. Do you want to trade options? Perhaps you want to invest in short term options which allow you to make higher returns, but also force you to trade shorter timeframes. Maybe you just want to use them to sell covered calls on your stocks.

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Many new traders very often mistakenly associate investing with trading while both have very little in common. Other than buying, selling and order execution, investing and trading could not be further apart. New traders that are experienced in long term investment strategies are very often taken aback and shocked once they enter the world of trading for short term profits.

Investing very often only requires the fundamental aspect of stocks being considered as potential candidates for a long term investment portfolio. By fundamental it is meant the profit and loss, long term prospects and bottom line of the company in which stock is being considered for investment purposes. Trading however, takes an entirely different approach with most of the focus being on the technical side of the stock. By technical it is meant in terms of how the stock trades within the dynamics of the larger markets.

When we think of technical stock trading the trader should think in terms of charts and chart patterns as well as major and minor support levels at the very least. Sectors that are in favor and out of favor. Daily financial and economic data released by various agencies. Larger market trends. Federal Reserve announcements. Options expiration each month. All of these factors have an impact on the market and very little to do with the fundamentals of an individual stock, which is why there is such a large difference between investing and trading.

Novice traders should consider studying technical analysis and Japanese candlestick charting before venturing into the shark infested waters of stock trading for short term gains. What applies to investing with success will seldom work with trading since the dynamics are different with each. Taking the time to study market characteristics and patterns on a daily basis and then implementing a trading system that is first tested is the key to success with short term trading.

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When you buy stocks, there are several different ways to place an order. If you sign up with Sharebuilder, you will be charged $4 per order if you place an automatic trade that takes place on the third Tuesday of the month. Doing this will save you on commission payments, but will it earn you the most money?

Yes, placing a market order is more expensive, $9.95, but sometimes it might be the smarter move. A market order is placed immediately, as long as the markets are open. For example, if you decide you want to buy 100 shares of Google right now and it the markets are open, if you place a market order, your shares will be bought at the current price.

The benefit to placing market orders versus automatic orders is that you can get the price you want right away. Sometimes you will want to buy a stock right away because you think the value will go up soon. If you buy it now in the first week of the month, it could have already gone up a few dollars by the third Tuesday, which would mean you've lost potential money. Let's say you could either buy 100 shares at $50 now, or you could wait two weeks until the third Tuesday. You decide to wait in order to save the $6 difference in the commission fee. It comes the third Tuesday and the price is now $53. You buy it at $5,300. It cost you directly $4, but you could have made $300 if you bought it earlier, so it actually cost you $300 plus the $4 fee minus the $6 you saved by passing on the $10 market order fee for a total of $298. That is a significant amount of money.

It could have gone the other way thought, too. Maybe you bought it now for a total of $5,000, but in two weeks it only cost $4,800. This is the choice you have to make. I recommend that if you have an automatic plan set up every month, go for the $4. This is effective dollar cost averaging. If you are buying many shares at a time and actively trading, you should place market orders when you feel the right time is. This can save a lot of losses. You have to always be strategic in how you buy and sell stock no matter how active you are.

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Many investors, after seeing huge falls in the value of their portfolios, are now turning to trading as a preferred method of making money from the stock market. This gives you the advantage of being able to go short as well as long so you can, if you prefer, look for weak companies rather than strong ones. So what is the most effective trading strategy?

Well there are lots of different strategies you can use but one strategy that I like to use when trading stocks is the classic moving average crossover. This makes use of exponential moving averages (EMAs), and although not perfect, it is generally more effective than the other moving averages because it is weighted towards the very latest prices.

What you do here is to first of all identify the longer term trend for a particular stock. You ideally want to find one that is trending in a certain direction on both the weekly and monthly charts. Then you plot the EMA (5) and EMA (20) on the daily chart and wait for a crossover to occur in the same direction as this trend.

For example let's say company X is trending downwards on both the weekly and monthly charts. Because it is in a downwards trend you would be looking to go short on any occasions when the EMA (5) crosses downwards through the EMA (20) on the daily chart, and it is confirmed when the candle or bar for that day closes.

This method of trading is generally quite an effective way of trading stocks because for a start you are always trading with the long-term trend. Plus these set-ups generally occur soon after a period when the stock briefly moves against this long-term trend, so it provides an excellent entry point.

So if you are looking for shares to short, then you want to find shares that are trending downwards on the weekly and monthly charts, and then go short when the EMA (5) crosses downwards through the EMA (20) on the daily chart.

Similarly if you are looking for long positions or want to actually buy shares in companies, then you want to look for shares that are trending upwards on the weekly and monthly charts, and then go long or buy shares when the EMA (5) crosses upwards through the EMA (20) on the daily chart.

Not all of these crossovers will turn out to be profitable but a fair number of them will. The key is to cut your losses as soon as possible after it appears that a crossover is not going to yield any profits. If you can run your winning trades for as long as possible, then you can potentially make some decent returns.

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The bourse might be smart place to throw your extra dollars and make some more quick bucks. Experts in share trading and stock market issues advice that; you 'invest with the trend' and if you don't, your resources will be lost on useless stock. Do not anticipate making lots of cash from an IPO by selling your twenty thousand shares. You won't believe that after the IPO those twenty thousand shares you sold rapidly gains value and in just two months, the value of the stock is four times the price you sold them to venrture into the IPO!!

Success in the bourse is based on how well you comply with the principal of trends. I refused to heed my friend's advice and blindly invested in shares which up to date have never gained even a dime. Most of us shy from going the same direction when the bourse hits a low. The market trends are extremely hard to assume due to various fluctuations, as such you are forced to comply with trends rather than your personal judgment.

The urge to buy the stocks with a low value at discounted prices is overwhelming but if the market is experiencing down trending it is suicidal to take this plunge since the truth is, you will go under with the market. The market turns around when you least expect so you have to tow the line with the market trend, it always likely that you will earn immensely when you trade with the trend even when you are sure that the market will turn around.

You should be careful in your projections, if the market is down 50%, there is room for more downward fall harming every bottom picker who has invested in them. The complex is that, if you are a bottom picker, you will burn your fingers since the trends depict a different script while your strategy translates to a different one. The best advice is, go to the counter, hear what the brokers are saying about the stock and what they know is doing well, and then do just that, that's how you trade with the trend, and the results are as good as you would want them to be.

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read the amazing, true story, in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

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Cheap stock trading may present the perfect opportunity for you to get your foot in the door of the investing world. This is because with cheap stock trading options you don't have to invest a great deal of money to get rolling. This means those with a limited about of extra cash to invest can take part in it. This also means that beginners can get some actual trading experience with low dollar amounts involved. That way they will only accrue small losses while they are still in the learning mode.

When you take part in this type of trading online, you will find there are quite a few such brokers out there. Many of them even offer you a particular amount of free trades when you set up a new account. This means that for that set number of trades, you won't be charged any fees. So any profits that you do make at that time will be 100% yours to keep. This is a very encouraging concept and one that you should consider taking full advantage of.

Some investors wonder if cheap stock trading is worth the investment though. They want to make money, and the often want to make it fast. That generally isn't going to happen with this type of trading though. Instead what you will find is that you can make some decent money with them. You aren't going to get rich but that doesn't mean you won't be pleased with the money you do make. Perhaps you will make enough that you can invest more in other types of stocks that do cost. However, this can prove to be a key starting point if you do want to get involved with trading now.

Take the time to find out more about cheap stock trading. You may discover it offers you a great opportunity to be personally involved in such investing. You won't have the stress of a large investment hanging out there over you either. You can still make some money too though with cheap stock trading, and over time the small amounts you walk away with can add up to a nice sum of cash for you.

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Stock Trading Community-Making money is the common aim of all people. There are several ways of making money. Whatever ways you pick up should be genuinely used by you. It is not that making money is quite easy. People have a perception that they would get rich very soon if they invest money in the stock market. It is the misconception that has been spreading here and there. Yes, it would be easy, if you have the right resources with you or with less effective resources you should never expect the hefty bucks. People having the right kind of dedication towards stock market can obviously make money.

Without the guidance of stock trading communities people cannot make success in the stock trading. The present stock market is very huge, then it used to be in the past. A single mind cannot keep a track on the ups and downs of this network of stock trading. Here, we feel the need of some communities which might help us in dealing with the volatile stock market.

Basically a stock trading community is a community of traders who buy or sell products through internet facilities. Most of the members of such communities make use powerful tools like “chat” and “Forum”. Such tools increase the efficiency of the mode of communications among the members of the community. Apart from from these tools, there is another popular tool which is 'blog'. The uses of blogs in various stock trading communities. You can also put your views on the trading websites by means of blogs. These are informative tools which would definitely enrich your stock trading knowledge.

Turn on your personal computer and get the membership of various stock trading communities. Within a few months you will come to know the benefits of these communities. At the initial months, you should focus at the research of online stock trading and after you have got satisfied with the gained knowledge you should go forward for further investments. Never take the help of brokers or traders .Instead of it, you should trust your stock trading community.

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It is not that long ago, since getting updated information from the stock market and updated stock quotes was a difficult task. Only traders on the trading floor had the current quotes, everyone else had to work with more or less outdated information. Those days are gone now, and with the real time desktop stock ticker every trader can access the same up to date quotes.

Information about the stock market and stock quotes is only any good if it is up to date and accurate. Basing buying or selling decisions on historical data is on no way an efficient path for trading stocks. With the desktop stock ticker comes real time stock quotes to everyone who needs them and trading stock is no longer done in the dark.

Before the age of real time desktop stock tickers only the institutional traders had access to current quotes, giving them a huge advantage compared to those who would have to do with more or less accurate information. The free desktop stock tickers usually do not offer real time stock quotes, but instead offers near-real-time quotes, that are delayed for up to 20 minutes. The bid and ask information is just as old.

Trading stock and deciding to buy or sell based on delayed quotes can best be described as educated guesswork. Quite often stock prices moves fast, and bids and offers based on old quotes are a sure way to loose money. For day traders delayed quotes are totally worthless, since the day trader buys and sell at very small margins.

Instead of trading in the dark, using guesswork, you are much better of with a real time desktop stock ticker. A realtime desktop stock ticker is the first step on the way to an intelligent trading strategy. The real-time desktop stock ticker provides instant and accurate stock quotes, bids and offers and the daily volume. This information is of vital importance when making stock trading profitable.

The above mentioned information is just the basics, most desktop stock tickers offers a wide range of information and features designed to guide the trader. Real time desktop stock tickers can be found in a variety of places. Most broker firms offer the stock tickers on connection with a broker account, but some brokers might charge a small fee for real time quotes.

Be sure to understand fully what the broker account includes before you sign on. If real time quotes are not included you should definitely find another broker, since real time quotes are essential if you want to make a profit on the stock market.

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If you have looked at the price activity in a stock or market chart you may have seen lines drawn from one price point in time to another and so on from there. Trendlines are aptly named as they help to define the range of price activity that a stock or market is exhibiting during the duration of that trend. If you look closely at such a chart you will begin to see where price intersects at or near this line perhaps more than once over the course of time. A trendline is a kind of connect the dots attempt at uncovering price activity within a trend which will eventually reveal price activity that will breakout of its range. If you are looking at a daily chart you will see this more frequently than when looking at a weekly or monthly chart.

Trendlines are simple expressions of the price points of intersection, much like a mathematical formula. It is said that math can be used to express all things in nature. Music has its melody which is expressed in mathematical equivalents. All things in our physical world can be expressed in dimensional forms. So too can a stock or a given market. Trendlines lines help to ascertain where and when a stock or market will break out into higher territory or break down in price. Trendlines are one simple way to gauge the relationship of price, in time, to price and timing.

Most investors know of the maxim buy when a stock or market is making higher high's and higher lows. This indicates strength within the security or market. The reverse is also true that one should sell lower highs and lower lows. This indicates weakness within the security or market. Trendlines can easily help solve the puzzle of market strength or weakness in relation to other price activity that has taken place before it and where in time and price that the trendline may become important again.

Professional investors use charts and its price activity to help them gauge the activity of other professional investors/speculators and to identify stocks that are being accumulated or sold. Trendlines help us formulate a plan to gauge when that demand on the buy side or lack of demand on the sell side becomes an important part of an entry (buy) or exit (sell) strategy.

There are lateral or horizontal trendline breakouts that occur and there are sloping trendline breakouts either of the ascending or descending type. There are trendline's that we begin from a bottom and there are trendlines that we begin from a top.

A trendline once drawn will continue to the next top or bottom pivot point or high or low in price. For the sake of simplicity, high prices are usually connected to high prices and low prices are usually connected to low prices to form the trendline channel. There it will intersect with the high or low and continue on. These intersections at price form the foundation of a trendline or trend. A trend is the continuation of a price pattern in a given direction. The range of that price pattern will vary significantly from security to security or market to market.

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What insider trading is
First of all, it is important to note that there are two different meanings for insider trading. The first one is illegal and it refers to anyone who makes a trade on the stock market and profits (or avoids loss) based on information about that company that was not public information at that time. The second one refers to a company officer trading company stock, which is not illegal unless they were using inside information to make a profit.

Martha Stewart
Perhaps the most famous example of insider trading in recent history is Martha Stewart. What exactly did she do wrong? Well, a company she invested in, ImClone, had a cancer drug that had been rejected by the FDA but that information was not available to the public at that time. The SEC believes that her friend Sam Waksal told her about this rejection and recommended selling her shares in ImClone immediately, which she did. By doing so, she avoided a huge loss when the stock price eventually dropped. That is a textbook case of insider trading, and she faced prison time for it.

Why it is illegal
The Securities and Exchange Commission sets and enforces rules to make the stock market as fair a place to trade as possible. They believe that when someone trades using information that is not well-known, it is not fair to the general public. A publicly-traded company is required to share its financial reports and any significant news with the world so that shareholders and potential shareholders can make informed decisions. After all, the company is owned by the shareholders and they deserve to know what is going on with their company.

How to avoid trouble
Probably the easiest way for you to get into trouble is if you work for a publicly-traded company and try to trade your company's stock for a profit based on information you heard around the office that has not been made public yet. Sharing or receiving this information from a friend at another company is just as bad. These situations are very tempting, and understandably so. It is hard to profit on a trade after the news has already hit the market. However, that is exactly why it is illegal, so you should try to avoid it. There are many gray areas on what is considered inside information, but if you are in doubt, do not trade your company's stock. There are thousands of other companies you can invest in.

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Long term vs. the short term, which one is better to invest in? This is a question that is very debated. Many investors will say long term is the best way to make money.

At the same time many traders will say that compound interest make short term trading the best way to trade.

Let us look at the advantages of long term trading first. When you trade for the long term you get away from all of that short term volatility. As a result you will be right a lot more. After all, a good stock should eventually go up in the long run.

Another advantage is that you can collect dividends. Many stocks can pay out nice dividends to their shareholders month after month. This could produce a nice monthly income for you.

One of the biggest benefits of trading long term is taxes. When you make money in the stock market you are taxed differently for long term and short term trading.

Long term trading has nice advantages over short term trading. So why would someone want to trade short term?

For one thing short term trading can pay the bills. Many long term investors will say that dividends will give you monthly income. This may not be the best way. Think about it most dividend stocks will pay you maybe 5% of the stock's value every year.

Divide this by 12 months and you only get .416% a month. So if you invested $100,000 into a dividend paying stock you may get $416 a month. Nice, you can't live off it but it's nice. However if you took that $100,000 and made $6-$8,000 a month you can do pretty well with that.

The other advantage of short term interest is compound interest. If you wanted it to grow you can just reinvest what you make. If you take that $100,000 and invest it at 15% a year after 2 years you would have $132,250.

If you took that same $100,000 and made 5% a month off it after 2 years you would have $322,509. Short term investing gives you a much greater growth advantage then long term.

Still long term investors will stay long term. They prefer the less risk, almost guaranteed profits of long term investing.

Some traders will have both a long term and a short term account. This way their money can get exposure to both slow and fast growth. It is really down to the individual trader.

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I love stock trading. I've actively traded in the stock, bond, options and futures markets almost every day for over 30 years, and I've learned some secrets to significantly improve my success. I will share them with you.

The cardinal rule it's this: "Don't get your ego involved!"

Always remember you're in this game to make money, not to impress your friends. You don't need to be right all the time... it's virtually impossible. So learn to take losses when a trade isn't working - and take them quickly and move on.

W.D. Gann had a great trading rule: "Cut your losses short, let your profits run".

I am a swing trader and I live by that rule. If a trade is working I hold it. If it violates my stop price I exit. Usually I like to hold trading positions for two weeks to three months, rarely longer.

These days with the proliferation of ETF's and options it's just as easy to be short as long. So we no longer need to worry about the direction of the market, or whether we're in a recession, going into a recession or in the middle of a boom... every day is a good day in the market. There's always an opportunity out there... we just have to find it.

I'm not going to teach you how to invest - I'm a stock trader - I'll teach you how to trade. If you want to invest... buy a bond!

Your capital is your weapon... guard it well. Don't trade with a full service broker - the fees will kill you until you have enough money to demand a big discount.

Here are some rules to help you:

1. The market is made up of stocks in a variety of industry groups that are all in different stages of rally or pullback. Your first job is to define these groups, follow them daily and get to know how they trade. The main groups I like to follow are financial services, technology, energy and metals and mining.

2. Trade in the larger stocks that trade lots of volume every day. Choose a handful of stocks in each group and follow them daily on your charts. I know a lot of you want the big killing on the junior market and I have a suggestion about that later, but that's another game entirely. If you find a $50 stock that makes $10 swings every 3 months and you can clip $5 out of each swing, that's $20 a year on a $50 stock - 40% - not bad.

If you want more action than that then use deep in the money options that have virtually no premium built in to the price and get your leverage that way.

3. Try not to have an opinion about the broad market direction... it's totally unimportant to your trading future. Instead, follow your groups and form a loose opinion of the direction of each group. If gold is going up then likely financials are going down so be long a gold stock and buy the Bear ETF on the financials.

If the general trend of your group is down then focus on taking the short trades in that group because the down moves will be bigger and vice versa.

4. Find some stocks that follow the 3 month cycle rhythm. Preferably stocks that tend to stay in trading ranges for quite a while and watch their charts every day, learn their patterns; lay in wait for them to come to you and then take your position either long or short. Don't feel you have to take any old trade that comes along... wait for all of your indicators to flash you the go signal.

5. I find it's critical to use some sort of momentum indicator like Slow Stochastics or MACD or RSI to give me the overbought/oversold readings as my first signal that a trade may be on. When the oscillator readings get to the 20 or 80 levels I get ready. Now I start to watch for a trendline break in the price or a breakout from a small consolidation pattern and I take a position. I place a mental stop below the last low or above the last high or for a maximum dollar amount I am willing to lose and I execute on that stop and get out.

6. Whatever money you have available, divide it into 10 and look to take 10 different positions, long or short it doesn't matter, usually it's a mix of both.

7. Be patient. You don't need to have all of your money deployed all of the time. Wait for the trades to come to you. If you get a sudden windfall move in a stock triggered by some news event and it takes the price into an area of support or resistance... grab your profit. These moves are reversed a big percentage of times and it hurts to watch that windfall disappear.

I am in process of writing a book that will give you a hands-on method for consistently making trading profits. But it isn't ready yet so in the meantime here is a resource you might want to look into.

This software works with low priced stocks and it can give you an unfair advantage. It can monitor hundreds of stocks at one time developing what professional traders call a "sixth sense"... a sort of "feel" for how the stock will behave in any given situation.

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I entered in the stock world around 2002 and only recently have I seen some really cash flow entering on my bank account.

Like everyone else I did all the newbie mistakes, which went from taking bad advice from people pretending to be "stock gurus" to buying tons of books regarding this subject. I lost ~$2000 during those dark times.

But you won't commit the same mistakes because...

1. Because You Have a Brain

If you're in the game for a while you will quickly realize if you want to make more money you need to multi-task and delegate assignments to other people in order for you to focus on what's really important... making money.

2. Unlike Most Scams Out There It Actually Works

I'll be honest, when I first heard about Marl, The Stock Trading Robot my scam senses were tingling, but since two of my close friends recommended it I decided to try it out.

One month later I got a nice cheque of $4572, just from Marl!

3. It's Cheap And They Have a Refund Policy

Even though most internet scams gloat about how they are going to take you from rags to riches in a matter of days, many of them don't have the refund policy, which means if you buy that expensive product that taught you nothing, your money is gone and some rich bastard is laughing while going to the bank.

Marl The Stock Trading Robot is actually the #1 business item being sold on Clickbank right now. That alone should convince you to try it out. Try it, make money. Don't like it? Get a refund, no questions asked.

But I promise you will not regret it because this is the real deal folks!

You can thank me later!

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Many people spend a lot of time doing research and selecting the right stocks to purchase. However, they often find it very hard to figure out when to sell the stocks. This is especially true for first time investors. The good news is that if you select your stocks carefully, there will be no need for you to sell them for a long time to come. But there might be instances when you will be required to sell your stocks before you reach your financial goals. So, how do you know when to sell your stocks?

Many people think that the right time to sell a stock is when its value drops. You might be given this advice by your broker. However, this is not necessarily the right thing to do.

Depending on the economy, stocks' value might go up or down. And the economy is dependent on the stock market. This ends up becoming a vicious cycle and it makes it hard to determine whether you should sell the stock or not. However, just as fast stocks go down, they also tend to go back up.

You have to do more research and keep up with what is happening in the company whose stock you have bought. Changes in the company can have a great impact on the value of the stock. For example, a new CEO can affect the value of the stock. A decline in the industry can also affect a stock. However, there are three good reasons to sell a stock and there are as follows:

• If you have reached your financial goals, you can sell your stock. You can take the money from selling and invest it into a safer financial vehicle.

• If there are major changes in the business you are investing in that cause or will cause the value of the stock to decline or drop, and you see no possibility of the value rising again, you should sell the stock before the drop in value starts.

• Supposing the value of the stock increases dramatically, you can sell it. You will make a tidy profit and you can reinvest the money.

If you are newcomer to investing in stocks, you should consult a qualified and reliable financial advisor or stock broker to help you make correct choices so that you can reach your financial goals without any problems.

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By Investing in shares in a public company, which has registration in a stock exchange an individual can get a share in the future income and value of the company. The capital of the company's business is divided into a large number of equal parts called shares. The people who buy these are the shareholders of the company. Shares represent ownership in a company. It is also called as equity and preference shares. Investing in shares, you become a part owner of the company and have the share in future value and profits.

1. Your share value increases as value of the company increases.

2. Profits to share to the investors known as dividends. The income payments are the dividends. They do not take this money as reinvestment for the company.

3. These dividends are taxed effective.

4. If shares are held for more than 12 months a 50% discount on any capital gains tax payable.

5. Capital gains will be yours when you sell at a price higher than the price you actually purchased the shares at.

Since the shares are small parcels of different companies they can generate high returns and increase the value or decrease the original value of the company. Shares are generally best for investors having a long term saving idea, longer investment period and high returns for long-term investments. The performance that the company has grown is shown in the profits. Future prospects of the investment holders and the company will increase more. If there is a capital loss it is by the shareholders. This varies from share to share depending upon the company.

The prices of the shares vary from day to day and it may go up or down on the same day. Due to the rise and fall of the economic confidence or changes in a particular industry the increase or decrease in value occurs in the share market. When you make the share investments as long term investment you are sure to secure your future. If the requirement of a high amount of cash occurs all you have to do is sell your shares and get all the liquidity that you need.

Share trading agencies help in selling or purchasing the shares from the identifiable companies through demit accounts. Preferential and equity shares are issued by the company's at par and issue price is the par value or the face value of the share and the number of shares multiplied by the face value is the stock held by the shareholder. Every day the exchange quotes the market price and share brokers and mediators will become the causes for the odd fluctuations in the market. Discount sale occurs when market price is less than the face value. The share is said to be sold at premium when the market price is higher than the face value. Dividend given by the company is expressed in % .The shareholders can check their investments the daily i.e., Monday to Friday through newspapers, TV media and Internet.

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China's $70 billion national pension fund will boost equity stakes in domestic companies and invest in the infrastructure industry, its chairman said.

``Many global pension funds are moving aggressively into alternative investments, but I'm bullish on real-economy investments and plan to boost our equity stakes in Chinese companies,'' Dai Xianglong said today in an interview in Suzhou, a city near Shanghai.

China's government is exploring the transfer of listed- company equity stakes to the National Council for Social Security Fund, or NSSF, as another source of funds for the pension agency, Dai said, without providing further details.

The fund earned more than 110 billion yuan ($15 billion) on its investments last year, giving returns of more than 30 percent, as stocks soared, Dai said. China's benchmark CSI 300 Index was the world's best performer in 2007 with a local- currency gain of 162 percent.

Improved returns will help the Beijing-based agency extend coverage to more of the country's 1.3 billion people, as their average age rises.

The fund invests in four asset classes: fixed-income, stocks, currencies and equity stakes, said Dai. The agency takes a ``cautious'' approach to stock investing and has no plans to lift its ceiling on buying equities, he said. He didn't give allocation breakdowns of the asset classes.

Low-Risk Investments

The pension agency said in September 2006 that it put more than 1 billion yuan into the 20 billion yuan Bohai Industrial Investment Fund Management Co. , the nation's first government- backed private-equity fund.

``China's infrastructure industry offers a lot of good, long-term, lower-risk opportunities,'' Dai said. ``Our main focus will be domestic since there's so much potential here.''

In terms of overseas investments, the fund will gradually expand abroad, Dai said. It had ``almost no subprime-related losses,'' he said.

In November 2006, the NSSF appointed UBS AG and nine other fund managers to help it invest overseas. NSSF had put $1.7 billion of its money abroad by the end of last year.

Global fund companies began competing to manage the money after the government dropped a restriction that limited the Beijing-based pension agency to domestic markets.

Dai, a former central bank governor, was named chairman of the country's social security fund last month.

Bloomberg

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China's stocks fell, dragging the nation's benchmark to a three-week low, on speculation new shares will dilute existing holdings and after the central bank said it will continue to order banks to set aside more reserves.

China Merchants Bank Co. dropped to an almost seven-month low on concern the ending of a two-year share lock-up this week will spark a sell-off by institutional investors. China Vanke Co. led developers lower after the People's Bank of China said it will ``vigorously'' reduce money supply by raising banks' reserve ratio, restricting funds available for loans.

China Railway Construction Corp., which starts accepting subscriptions for its initial share sale today, also added to concerns funds will be diverted from existing issues.

``There's a lot of supply flowing into the market and that's affecting sentiment,'' said Gabriel Gondard, who helps manage the equivalent of $10 billion at Fortune SGAM Fund Management Co. in Shanghai. ``Investors are also concerned over the way the central bank will rein in inflation, which adds uncertainties in the stock market.''

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, fell 2.8 percent to 4,570.67 as of 1:07 p.m. in Shanghai, headed for its lowest close since Feb. 1. All 10 industry groups fell, with a gauge of financial and property shares contributing the most to the main index's decline. The measure is down 22 percent since its Oct. 16 peak.

Merchants, Pudong Bank

China Merchants, the nation's largest dual-currency credit card issuer, fell 0.75 yuan, or 2.5 percent, to 29.60, the lowest level since Aug. 1. Shanghai Pudong Development Bank, the Chinese partner of Citigroup Inc., declined 0.85 yuan, or 2.1 percent, to 39.13. The bank said last week it is studying a plan to sell new shares to the public.

China will stick with a tight monetary policy as controlling inflation remains a top priority, said Yi Gang, vice governor of the People's Bank of China, yesterday at an economic forum in Beijing. The central bank will ``vigorously'' soak up liquidity by raising the level of reserves that banks must keep on hand, he said.

Vanke, the nation's biggest publicly traded developer, fell 0.9 yuan, or 3.8 percent, to 23.09. Financial Street Holding Co., a Beijing-based developer, lost 1.49 yuan, or 6.3 percent, to 22.14, the biggest drop since Jan. 28.

China Construction Corp., the builder of more than half of the nation's rail links since 1949, may raise $5.4 billion in first-time stock sales in Shanghai and Hong Kong, said four people with direct knowledge of the plans. That would be the world's biggest stock sale this year.

Bloomberg

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Feb. 21 (Bloomberg) -- China's stocks fell for a second day after crude oil rose to a record and Shanghai Pudong Development Bank Co. announced plans to sell new shares.

China Petroleum & Chemical Corp., known as Sinopec, dropped by the most in almost four weeks on concern record oil prices will erode earnings at the refiner.

Shanghai Pudong Development Bank Co. completed its biggest two-day decline since November 1999 on concern its plan to sell new shares will drain capital from existing equities.

``Surging oil prices and coming fund-raising plans have undermined market confidence and encouraged investors to sell,'' said Wang Zheng, who manages the equivalent of $400 million at the asset management unit of Everbright Securities Co. in Shanghai.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, declined 32.69, or 0.7 percent, to 4,876.03 at the close. The measure dropped 2.2 percent yesterday.

China Petroleum, Asia's biggest oil refiner, decreased 0.83 yuan, or 4.4 percent, to 17.90, its steepest decline since Jan. 28. Sinopec Shanghai Petrochemical Co., China's largest maker of ethylene, fell 0.03 yuan, or 0.2 percent, to 13.10. Sinopec Yizheng Chemical Fibre Co., China's largest chemical fiber maker, lost 0.05 yuan, or 0.5 percent, to 9.16.

Crude oil for March delivery closed at a record for the second consecutive day yesterday in New York, rising 0.7 percent to $100.74 a barrel on speculation demand for fuels remains high. That's 66 percent higher than a year ago.

Airlines, Pudong Bank

Chinese oil refiners cannot increase prices of their products to pass the higher cost of crude onto customers, unless they have government approval.

Airlines also declined as rising oil prices increase fuel costs. Air China Ltd., the world's biggest airline by market value, lost 0.82 yuan, or 3.8 percent, to 21.01. China Southern Airlines Co., the nation's biggest carrier by fleet size, declined 0.32 yuan, or 1.4 percent, to 22.29. China Eastern Airlines Corp., the nation's third-largest carrier by fleet size, fell 0.58 yuan, or 3.6 percent, to 15.54.

Pudong Bank, the Chinese partner of Citigroup Inc., tumbled 2.75 yuan, or 6 percent, to 43.23, the steepest two-day drop since Nov. 10, 1999. The bank hasn't decided on the details of its new share sale, the proceeds of which will be used to boost core capital, it said in a statement last night.

Its stock plunged by the 10 percent daily limit yesterday on speculation the company will sell 1 billion new shares worth about 46 billion yuan ($6.43 billion).

Other banks fell on concern they have similar fund-raising plans. Industrial & Commercial Bank of China Ltd., the nation's biggest listed lender, decreased 0.13 yuan, or 1.9 percent, to 6.62. China Merchants Bank Co., the nation's biggest dual- currency credit-card issuer, lost 0.74 yuan, or 2.3 percent, to 32.20. Shenzhen Development Bank Co., controlled by buyout firm TPG Inc., retreated 0.80 yuan, or 2.3 percent, to 33.99.

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, fell 0.9 percent to 4,527.18. The Shenzhen Composite Index added 0.4 percent to 1,423.21.

Bloomberg

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Feb. 19 Bloomberg reported the Bank of China shares:

Bank of China Ltd. rose the most in almost a month in Hong Kong trading after Reuters reported the lender has set aside enough money to cover its investments in securities tied to U.S. subprime mortgages.

Bank of China jumped 7.5 percent to HK$3.29 at 11:19 a.m. local time. The company expects ``marked'' profit growth for this year and is considering buying an insurance company, Reuters also said late yesterday, citing Chairman Xiao Gang. Spokesman Wang Zhaowen confirmed Xiao's comments.

The bank may have to write down the value of overseas securities by 35 billion yuan ($4.9 billion), analysts at BNP Paribas SA have estimated. That would amount to three-quarters of profit in the nine months to Sept. 30, 2007.

Bank of China has fallen 33 percent in Hong Kong since Oct. 30, when it reported profit growth that trailed competitors because of losses on its $7.95 billion of subprime-related investments.

Bloomberg

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