Are You Ready

to Begin Investing

Developing Your

Short Term Investing Goals

You’ve reviewed the outline of how your trading plan should start and you’re now ready to begin the initial stages of your trade plan. We’ll step through each piece in this series, and we will walk through the process of each step so that you can establish your trade plan and provide for contingencies.

As you recall, our first step was establishing your goals so now we need to determine exactly what are your goals?

In order to fully establish your goals you’ll need to look at both short and long term goals. For the short term, you will want to establish attainable goals that can be adjusted for long term prospects.

So for the short term we’ll look at what your goals are over the next 30 days and we’ll talk about the steps to achieve them.

 Short Term Investing Goals:

 A) Determine investment objectives

Everyone has a different set of investment objectives. There are those of us who trade for the sheer enjoyment of it and those of us who trade for tax reasons. If you’re trading for enjoyment, you’ll get far more enjoyment out of investing with a specified profit in mind, and for tax purposes you’ll be looking for both short and longer term investments.

For short term investing, you’ve decided that equity options are your investment of choice. Initially, you’ll want to take a look at the group of equities that most interest you, whether it’s a specific company or it’s a specific industry group. For instance, you may find that IBM doesn’t really appeal to you, but DELL does. In this case, you’ll want to focus your market research on DELL and find out the short and long term trading patterns that have been established.

B) Researching trading patterns

So you’re not quite sure where to start!! Your options for beginning research are as numerous as the number of companies that are out there. You can contact the company directly and ask for company reports, you can go to the companies website and review annual reports online, search out rating services (such as Morningstar, Zach’s or even the SEC website where you can find reports in Edgar), or you can do your own market research right online with various quoting services that can offer you unbiased information. You also can seek out an investment advisor who can help you through this process.

C) Understanding what you’re reading

It’s important that with the maze of information that you are researching that you find a way to comprehend what you’re reviewing. There are many resources available to you to make sense of all of the numbers and you should avail yourself of them. Simple searches on the internet can help de-mystify all of this data.

D) Setting your investment accounts up

You’ve figured out that you wish to invest in DELL options and you’ve done all of your research but you’re not quite clear on how to invest in the options. The first thing you will need to do is to find a broker to help you with these transactions. There are disclosures to be made by the broker to you, including their fees when you invest in a trade. Don’t forget to ask the right questions of your broker, including minimum investments (some brokers will charge a fee unless you guarantee a certain dollar amount in trades), fees for buying and selling (some companies charge different fees for purchase and sales especially with options trading), and you’ll also want to find out about settlement dates.

Your broker should also offer you all of the available literature on options trading. This includes certain required publications. You will have forms to fill out which may be confusing. Do not hesitate to take the time to read them thoroughly before signing anything! Don’t let your broker dictate what you’re doing, if you’re not comfortable with what they’re telling you, look for someone else!

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