Market timing is important
It's important, even critical, to know the phase of the market.
Experts agree that 60% of a stocks movement is the result of the
markets movement, and 30% is the result of the movement of the
group within which the stock resides. That leaves only 10% of a
stocks price movement attributed to the stock itself. It's important to
understand the phase of the market.
Follow-up actions
The importance of thoroughly understanding a strategy and its
suitability for your personal investment objectives cannot be overemphasized.
You should also be aware of the follow-up protective
actions that can be employed to limit losses should the market move
against you.
Recommended books for the newcomer to read include:
Gastineau, Gary L. THE OPTIONS MANUAL, 3rd ed. McGraw-
Hill, New York 1988
McMillan, Lawrence G. OPTIONS AS A STRATEGIC
INVESTMENT, New York Institute of Finance, New York
1986
Cox, John C. and Mark Rubinstein, OPTIONS MARKETS,
Prentice-Hall, Englewood Cliffs, NJ 1985
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