http://www.options-trading-education.com/7061/european-style-stock-options/ Trading Consumer Goods Stocks In trading European style options, an options contract can only be exercised on expiration of the options contract. When trading exchange-traded options in the USA, standardized stock options contracts typically consist of one hundred shares of the stock. Contract lengths are standardized. Although European style stock options can only be exercised at expiration, unlike American style options, one can exit a European style stock options contract at any time during the contract period. Thus a stock options trader can execute the opposite to trade and pocket his profits or limit his losses without waiting until the end of the contract period. The difference in execution of options trades between European style stock options and American style stock options can be significant for stock investors. Buying Calls with European Style Stock Options A call gives the purchaser the right to purchase the underlying stock at a set price as defined by the contract. This price is called the strike price. In the case of European style stock options this can only happen at the end of the contract term. With an American style options contract the purchaser can execute the contract at the most opportune time during the contract period. An issue arises here for an investor who expects to be able to use a call option to take advantage of an expected rise in a stock price. If the stock price moves up rapidly the investor may choose to execute the contract and buy the stock. He wants to keep the stock but is concerned about a reversal. As such he can buy puts on the stock to protect his gains while still holding the stock. This is not possible in trading European style stock options as one cannot execute the contract and take the stock prior to expiration. The only way to guarantee a profit when the options contract price rises is to exit the contract and take a profit but not hold the stock. This may be limiting for a number of stock options trading strategies.

1. Trading Consumer Goods Stocks
By www.profitabletradingtips.com

2. Trading consumer goods
stocks often requires a
different approach than
trading more volatile stocks.
Trading consumer goods
stocks often has to do with
timing.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

3. Here we are not talking
so much about day
trading and following
technical analysis
signals but
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

4. developing a sound
appreciation of the
fundamentals that drive
prices and trading of
consumer goods stocks.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

5. The overall economy is
a major factor for price
fluctuations when
trading consumer goods
stocks.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

6. In general, Proctor &
Gamble, Clorox, and other
US based consumer goods
stocks do not rise and fall
in multiples due to their
general stability.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

7. People keep buying dish
soap, laundry soap, and
bleach even during a
recession. They don’t
buy any more when
times get better.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

8. However, when a
recession hits, the
relative value of
consumer goods stocks
rises because the value
of virtually every other
stock falls.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

9. Thus trading consumer
goods stocks on the
verge of a recession or
on the verge of a
recovery can be
profitable.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

10. Even though these stocks
may fall due to reduced sales
of some products they tend
to be the safest port in a
storm when a recession hits
and don’t fall as far as other
stocks.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

11. Whom Are We Talking
About?
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

12. Here is a short list to consult for trading
consumer goods stocks.
• PROCTER & GAMBLE CO
• PHILIP MORRIS INTERNATIONAL
• COCA-COLA CO
• PEPSICO INC
• ALTRIA GROUP INC
• COLGATE-PALMOLIVE CO
• CLOROX
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

13. These are all well-
known companies with
lots of available
information to help you
determine intrinsic
stock value and margin
of safety.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

14. When trading consumer
goods stocks like these,
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

15. your concern will be
significant market
movements instead of the
sort of small up and down
fluctuations that one uses for
scalping in day trading.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

16. Although profitable
market movement may
occur within the span of
a single day the setup to
profit
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

17. from trading consumer
goods stocks will
commonly be longer as
it requires that you
learn about a stock and
what drives its price.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

18. How trades fail in
trading consumer goods
stocks is when the
trader does not stay
current with the
fundamentals.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

19. Options in Trading
Consumer Goods Stocks
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

20. Buying stock options on
consumer goods stocks
helps limit risk and
offers a means of
leveraging your trading
capital.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

21. When trading consumer
goods stocks one often
assesses the
fundamentals that drive
stock price and assess
the state of the
economy.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

22. The rational is that is
the economy is going to
get better the price of
the stock may fall a bit
as investors rush to
profit from faster
growth.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

23. If the economy is going
to falter the price of a
consumer goods stock
may rise as investor flee
poor investments and
seek shelter in
consumer stocks.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

24. Thus trading consumer
stocks is often a means
of trading in a direction
contrary to that of the
US economy.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

25. Because the timing of a
market decline may not
be certain,
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

26. it is often safer and
more profitable to buy
calls or puts on a
consumer stock and
execute when the
market change occurs.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

27. A call allows a trader to
purchase a stock at a set
price no matter how
high it might rise and a
put allows him or her to
sell no matter how low
a price drops.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks

28. As such trading
consumer goods stocks
with options can be
profitable in both
market directions.
http://profitabletradingtips.com/trading-investing/trading-consumer-
goods-stocks