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The Way to Trade: Discover Your Successful Trading Personality by John Piper

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Chapter 19: FUTURES AND OPTIONS

This book is primarily aimed at those looking to trade futures and options, but for the sake of completeness we also want to cover stocks, and our commentary on options will also be suitable for those (misguided souls?) who want to buy options.

Stocks

We will start with stocks, which are the most basic trading vehicle available. The mechanics are simple. You buy the stock and you then benefit from any price appreciation that accrues, and you also receive any dividends appropriate to your period of holding. However, if the price falls away then you suffer a corresponding loss. Gearing can be obtained by borrowing part of the funds to purchase the stocks initially and some brokers also have a similar arrangement. ...

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