Q: When I want to purchase stock on etrade the cost is 5.69 a share, but the ask price is 5.70, what is the ask price?

A: There are three prices that are posted on your trading window that traders look at the most. The Bid Price, the Ask Price and the Last Price. The last price is simply the most recent price that the stock was traded at. The bid price is the highest price the buyers are willing to pay for the stock at that moment in time and the ask price is the lowest price the sellers are willing to sell at. Therefore If you are a buyer who wants to buy a stock at the market, you would have to make a trade with a seller who is willing to sell you their stock at their offering price. If you decided to sell stock, you would in turn make a trade with someone who is willing to buy your stock at their highest bid price. Remember it takes two sides to make a trade and just like real estate there is a price the seller is asking and many times the buyer of a property will submit a lower price than what the seller is asking in hopes that the seller will move to them in order to complete the transaction. The same principle applies to the stock market.

Ronald C. asks:

Q: How solid are the energy stocks in this new market in your opinion?

A: Energy stocks are, in our opinion, a great place to be if you are a trader, especially if you are a swing trader who is looking to capture profits within a 3 week to 3 month window. There is enough volatility there to exploit the technical signals and as a result of this volatility many opportunities open up for the option traders. There is a good book out now entitled, ‘Game Over’ written by Dr. Stephan Leeb. This book may give you a completely different outlook with regard to the energy sector whether you are a trader or investor. According to Dr. Leeb, our world is running out of energy and it’s the perfect time to create great wealth once you understand how to position yourself in the energy stocks.

Link to ‘Game Over” by Stephan Leeb

Susan D. asks:

Q: What factors should you consider when buying a stock: price, history, dividend? Other factors?

A: There are many factors we would consider before buy a stock but price history is the most important factor for sure. The other thing we would have to consider is the length of time we plan on holding on to the stock. If you are a long term investor, than dividends would be something to consider but don’t be fooled by a high dividend paying stock because many stocks have dropped far below what the dividend is paying as a percentage. It all comes back to price. If you are not sure about how to determine what the price trend of the stock is then you are more than welcome to come back to another one of our webinars so you can learn more about technical analysis.

Brad K. asks:

Q: What would you suggest a 25 year old with decent income invest in who is ok with high risk/reward?

A: Just because you have a high risk tolerance doesn’t mean you have to expose yourself to high risk transactions. In fact, some of our most profitable trades have come to us as a result of conservative “lower risk” strategies. I would suggest you take time to learn about our four most profitable option strategies. Our ‘ 5 Points for Trading Success’ book has been a best seller since it was published in January 2008 and it’s a great place to get started.

Click link below to review book:

https://www.themarketguys.com/store/products/The-Market-Guys%27-Five-Points-for-Trading-Success%3A-Identify%2C-Pinpoint%2C-Strike%2C-Protect-and-Act!-(Hardcover).html

John L. asks:

Q: How often are trailing stops moved?…Daily or minute by minute?

A: If you are using the trailing stop feature on the Power Etrade Pro Trading Platform then the stop can be set to automatically track the price or a percentage of price which means the stop price would be dynamically adjusted as the price of the stock moves up. Many times we will manually adjust the price as we see the stock move up as it establishes higher role reversal support levels. This would take more skill to accomplish but with a little practice it becomes much easier to do.

Karen S. asks:

Q: Can one company’s shares be traded on more than one exchange?

A: There are many exchanges and yes, stocks can be traded on multiple exchanges. You may also be referring to the difference between listed shares and shares traded over the counter. Listed companies are generally the large cap stocks identified by a three letter identifier while over the counter stocks are traded on the NASDAQ and usually have a ticker symbol that is four letters. There are also some stocks that are dually listed both on the NYSE and NASDAQ and from time to time you will see stocks move from one exchange to the other as their financial requirements for such listing change over time.

Baleke K. asks:

Q: If this is not a good time for beginners to buy and hold, then what would be the best strategies to consider?

A: Don’t misunderstand what we meant when we say, “this is not a buy and hold market”. This does not mean investors should stay out of the market it just means you should not buy and hold and hope that your stock is going to go up in price. Buy and protect would be a more optimistic way of describing the type of market we are in right now. There are many opportunities for investors and traders alike, but the conventional buy/hold strategy is not the best strategy to put your money into now. The “Golden Buy/Write is a great strategy to learn right now and it wouldn’t take more than an hour to learn. If you would like more information about our modified version of a covered call which we have labeled the Golden Buywrite then just send an email to info@themarketguys.com and we will get you’re the information you need to get started.