- Personal Finance
Make Money Investing in Google today
Stocks are confusing, the market is confusing, investing in general can be confusing. But if you only have $2,000 - $3,000 dollars, there is a very simple strategy you can use that can capture profit, and quickly. Google is currently about a $620 stock. In order to buy 100 shares, you would need to have almost $62,000 to invest in just one company. Not many people have that kind of money to throw around and gamble with.
However, what if there was a way that you can "control" 100 shares of Google (Goog) for between $2,000 and $3,000 and make close to the same amount of money, if not more than if you owned $62,000 of the stock out right. Using Options is just that strategy. I will explain the concepts of options in a later post, but essentially one option is equivalent to 100 shares of stock.
The most important consideration to making money with options is two-fold. 1) What direction do you think the stock will go and 2) How long do you think it will take to move that direction. Fundamentally, Google is everywhere and run by one of the best management teams in the world. From their search penetration to the Android to other innovative connectivity and media applications, Google is clearly continuing to expand its footprint. How long will it take? That all depends on the overall market and economy as well as geo-political factors that are out of our control. But what if the time didn't matter? What if you only had to wait 1 week, or 1 day even. Good news, is thats just what you can do to make several hundred dollars a day. How is that possible?
Looking at Google's performance over the past 3 months, Google on average, has a daily range of between $5-10 dollars a share. That means on a given day, 100 of shares of Google is moving up or down almost $500 - $100 a day. With some carefull observation and decent timing, you can buy and sell Google on these daily moves and capture profit. So why don't more people do this?
The downside risk is that you buy Google in the morning, and by afternoon, it goes down, losing you money. To avoid this bad fortune, when you place your order, immediately place a sell order for a price right below where you bought it. This way, if you're thesis holds that Google will go up, and in fact it goes down, you sold out of your position with minimal loss. Eventually, if you continually pick the wrong direction, (you will be losing, $50 - 100 each wrong guess) you will run out of money. But as long as 1 out of 4 days you pick correct and capture $500-1,000 profit, you will end up ahead. The more experience and knowledge you gain about the stocks behavior the better you will be at deciding which days to play, and which days to stay away.