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Option Trading - How to Trade Options For Insurance, Income, and Speculation

By Ivan R. Moore 

To start trading in options trader needs to have stockpile, options trading account, a trading stage and small amount of capital. With options trading trader can increase their money, can have insurance on their stocks and speculate in the stockpile market by calculating a huge number of shares with smallest amount. Options help the trader to protect himself from adverse movement on one side and also help to get gain on favorable movement.

Following are the ways through which traders can make money using options.

Insurance: Insurance is the common option strategy to save your investment against any unforeseen calamity. Insurance is the way of hedging. Initially options were formed for this reason, to insure stock owners that their stock will be protected and no blow will affect their stockpile. This strategy of option is used by fund managers and business owners when they set up innovative product.

Income: This is the famous strategy of options which helps the trader to earn less risky income from the stock pile they hold. This strategy is known as Selling Covered Calls and it is extensively used by both beginners and professionals. By using this strategy many traders sell call option on their stock and increase their income on monthly basis. There are different income strategies of options e.g. selling puts secured by cash, selling spreads, butterflies.

Speculation: Speculation is another strategy of options which is commonly used. Under this strategy, trader buys some option contracts to open up a hedge position. Trader buys contracts because he thought that stock value will either go up or down in near future. Due to this, trader will be able to deal with thousands of share with minimum amount of money.

There is fable that only professionals and experts can make money using options because they have inside information. But this is not true. Anyone can use trading options and can get good returns. Many of the strategies of options like speculation help the trader to know what he is exactly going to lose in forex market. It takes a little amount of time to learn options and its strategies.

Trade option is a simple and successful way to increase income. It also provides insurance and power to control thousands of shares with smallest amount of capital.

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Article Source: http://EzineArticles.com/expert/Ivan_R._Moore/408140

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Agency Restores Choice for Consumers Cheated by Financial Companies

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) finalized a rule that bans banks and financial companies from inserting certain “forced arbitration” clauses in credit card, auto loan, student loan, payday loan, and other financial contracts. The rules will help consumers who were unknowingly and illegally overcharged to get refunds.

“The rule will help to combat the culture of companies profiting from charging illegal fees and committing other crimes against their customers,” said Rohit Chopra, Senior Fellow at the Consumer Federation of America. “This is an important step of restoring law and order to the financial marketplace.”

Arbitration is a method that resolves disputes outside the court system. Tens of millions of financial contracts include clauses that allow companies to block lawsuits from moving forward in court, including those by a group of consumers banding together.

In 2010, Congress banned forced arbitration clauses in mortgage contracts. Congress also directed the CFPB to conduct a study of forced arbitration clauses and restrict their use if doing so would be in the public interest.

Today’s rule does not ban forced arbitration altogether. Instead, it bans arbitration clauses only if they forbid groups of consumers from getting their day in court, sometimes referred to as a “class action.”

Group Claims

Companies that break the law by overcharging millions of consumers a small amount know that individual consumers have little incentive on their own to spend the time and energy to take the company to court. The most effective way to get a refund is to join together with other consumers in similar situations.

For example, credit card companies paid out hundreds of millions of dollars to consumers who used their credit cards when traveling overseas. Roughly ten million consumers were given refunds as part of the action, which alleged that the credit companies conspired to conceal markups and fees on foreign exchange rates. Many of the consumers who benefited probably did not know they were cheated by their credit card company.

CFPB Forced Arbitration Study

In 2015, the CFPB published a 728-page study on forced arbitration. The study concluded that forced arbitration limited relief for consumers. Other key findings included: Few arbitration cases involved small claims. Most consumers pursuing an arbitration case were seeking relief for more than $1,000. No evidence that forced arbitration reduces prices. There was no statistically significant evidence that forced arbitration leads to lower prices for consumers. Frequently used to block group claims. The study revealed that it was uncommon for companies to block individual lawsuits, but frequently used to block class action lawsuits.

The study also found that, over a five-year period, 160 million consumers received $2.7 billion in cash, refunds, and fees, far more expansive that relief obtained through individual arbitration filings.

“The final rule is closely tailored to the findings of empirical studies on arbitration and should withstand any frivolous challenges in Court,” Chopra said.

Support from Consumer and Veterans Groups

Industry lobbyists have vigorously defended arbitration, noting that arbitration is faster and cheaper than going to court, but have struggled to defend the practice of denying the choice to a consumer. Today’s rule does not limit consumers from voluntarily resolving a dispute through arbitration.

Denying a consumer the choice to pursue a group claim can allow certain frauds to continue. According to a complaint by the Department of Justice, Santander illegally repossessed more than 1,100 vehicles from members of the military. Santander succeeded in concealing the crime from the public and other servicemembers by blocking a group claim by US Army National Guard Sergeant Charles Beard, forcing him into an individual, private arbitration. Eventually, regulators caught Santander in similar illegal conduct against another servicemember. The rule would ban such conduct.

Consumer and veterans groups strongly supported the CFPB’s proposed rule. In a letter from a coalition representing 5.5 million current and former servicemembers and their families and survivors, The Military Coalition noted, “Our nation’s veterans should not be deprived of the Constitutional rights and freedoms that they put their lives on the line to protect, including the right to have their claims heard in a trial by a jury when their rights are violated. The catastrophic consequences these clauses pose for our all-voluntary military fighting force’s morale and our national security are vital reasons for the CFPB to act quickly to finalize the regulations.”

Contact: Rohit Chopra, rchopra@consumerfed.org

The Consumer Federation of America is an association of more than 250 non-profit consumer groups that, since 1968, has sought to advance the consumer interest through research, education, and advocacy.