Overview of a Trade

An enjoyable equity and/or derivative trade provides the opportunity to learn something new while making a profit.  Since trading is not without risk, traders need to conduct solid research, closely examine price & volume as well as volatility trends, and construct a quantitative trading plan.

A good place to start is by evaluating the company's fundamentals and comparing them with the fundamentals typical of competitors and the industry or sector they compete within.  Here are a few representative websites to get started with this process:

 Company Website

 Google Finance

 Wolfram Alpha 

Vanguard Industrials ETF: VIS

Bloomberg Market Data

If the possible trade passes this initial screening process, price & volume trends over varying time periods as well as volatility trends can be evaluated next.  This can be done quickly by looking over charts or by downloading equities and derivatives data for a deeper analysis.  Here are a few representative websites to get started with this process:

Chart IQ

Google Finance


Borse Frankfurt

Options Clearing Corporation


Finally, a trader may then chose to construct a trading plan by quantifying potential risk and reward over a set time period.  Maximum profit, break-even, and maximum loss points are examined via supply & demand estimates, the Black Scholes equation, or a host of other quantitative models.

IMF Economic Forecasts

CBOE Options Calculator    


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