Strike Price The strike price is the actual price at which the option holder may buy or sell the underlying security as defined in the option contract. For example, a GE December 30-Strike call gives the buyer of the option the right to buy 100 shares of General Electric at $30 per share between now and the December expiration (third Friday in December). Expiration Date The expiration date is the actual date that an option contract becomes void. Stock options normally expire on the third Friday of each month. This means if you have a December stock option, it will expire the third Friday of December. You should always check with the exchange or your brokerage firm for the exact times of expiration and the procedure they use. Be aware that in most cases, pending option contracts that are in-the-money at option expiration will be exercised automatically if the seller of that contract has not closed out (bought back) the short option prior to expiration or if the buyer of that contract has not closed out (sold) the long option prior to expiration. Option Type There are two types of options - call options and put options. A call option purchase profits when the price of the underlying security moves higher. A call option short sale profits when the price of the underlying security moves lower. A put option purchase profits when the price of the underlying security moves lower. A put option short sale profits when the price of the underlying security moves higher. This information is not a Chuck Hughes scam. Please, always check to make sure you are buying your Chuck Hughes review from an authorized Chuck Hughes advisory. Risk Management The best step to reduce risk is not to buy a Chuck Hughes scam. Only buy from authorized Chuck Hughes Review and Chuck Hughes Advisory dealers. You can help manage risk with the following web sites and programs, Chuck Hughes Advisory, the Chuck Hughes GPS, the Chuck Hughes Advisory, the Chuck Hughes MVP, the Chuck Hughes Wealth Creation Alliance and Chuck Hughes Options. These products are not a Chuck Hughes scam. The first step toward intelligent risk management is to trade options only with that portion of your capital that can be comfortably devoted to speculation. This will permit you to trade rationally and to sleep soundly which is not possible if you’re ‘Safe Money’ is at risk. Never trade options with money needed to pay living expenses. Restrict your options trading to funds that can be lost without undue financial hardship. Once you determine the amount of your available trading capital, allocate no more than 10% to any one trade. This should help mitigate losses when losing trades occur. This rule holds regardless of how successful you have been in the past and regardless of how attractive the next trade appears. There will always be losing trades. By compounding your capital after a few profitable trades, you are exposing yourself to potentially painful losses once that losing trade comes along. If you are losing too much you may not have a real Chuck Hughes Advisory and may have a Chuck Hughes scam. 

Chuck Hughes Scam

Hughes Chuck scam

Hughes Chuck scam

Trend Confirmation Reduces Losses The 1-Month/20-Month EMA filter only allows us to trade in the direction of the major trend. If you do a Chuck Hughes review you will see this is a popular method to reduce losses. Trend confirmation can be seen in the Chuck Hughes GPS, Global PowerTrend System (GPS), the Chuck Hughes MVP, the Chuck Hughes Wealth Creation Alliance, the Chuck Hughes Advisory, Chuck Hughes Options systems, and the Chuck Hughes advisory. This helps prevent “whipsaw” trades in the Chuck Hughes advisory, when counter-trend rallies or sell offs occur. Preventing whipsaw trades can increase profits, reduce losses and increase the percentage of winning trades. For example, the 1-Month/20-Month EMA price chart below for the Emerging Markets ETF (EEM) shows that the major price trend for EEM was bullish from 2004 until June of 2008. In June of 2008 the 1-Month price crossed below the 20-Month EMA indicating a major price down trend. During the 4 year period from 2004 until 2008 when EEM was in a major price up trend, the shorter-term 50-Day/100-Day EMA system issued three counter-trend “sell” signals all of which turned out to be losing trades. Using the 1-Month/20-Month EMA as a filter for the 50-Day/100-Day EMA System would have avoided these three losing whipsaw trades. Remember, this is not a Chuck Hughes scam!