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Now, part of that will be predicated on what you can afford to trade, and what you’re comfortable to trade. You may say, “Rob, you know, I’ve done this for a little bit now, I’ve traded a few stocks, and when they get up above $50 or $70, yeah, I get a little bit worried about that,” then you know you need a range lower than that. Trade Navigator has a great scanning feature to do that just that.

The second one, the ask is this is how much money we’re asking you to pay to buy it for us. If you look at an option and, let’s say, the option has a price of $2 by $2.10, so that’s the bid is $2 the ask is $2.10. Which one would you rather sell it for?

Those three pieces are going to be critical to choosing your options and your stocks and your components for what you’re looking to trade in your positions. Instead of just plucking from air a stock and saying, “Ooh, I’m going to trade this one because my buddy said it’s a good stock to trade you,” need to make sure you make an educated decision.

Now, part of that will be predicated on what you can afford to trade, and what you’re comfortable to trade. You may say, “Rob, you know, I’ve done this for a little bit now, I’ve traded a few stocks, and when they get up above $50 or $70, yeah, I get a little bit worried about that,” then you know you need a range lower than that. You see, I may look at the stock and a stock is trading at, let’s say, $35, but I see the option is trading at $14, $15– that price may be too way too expensive for me, so that stock may work, but it may not be the right one for you. Their options are a little expensive for the average person that wants to trade because they get up into that $15, $18, $20 range, and that might be more than the average individual, especially if you’re newer, is willing to put in the trade. Instead of just plucking from air a stock and saying, “Ooh, I’m going to trade this one because my buddy said it’s a good stock to trade you,” need to make sure you make an educated decision.

Number three is the options price. You see, I may look at the stock and a stock is trading at, let’s say, $35, but I see the option is trading at $14, $15– that price may be too way too expensive for me, so that stock may work, but it may not be the right one for you. Their options are a little expensive for the average person that wants to trade because they get up into that $15, $18, $20 range, and that might be more than the average individual, especially if you’re newer, is willing to put in the trade.

I’m asked all the time by traders, “Rob, what companies should I trade? Today, let’s discuss the process for you to find candidates for you to trade.

I want you to look at whatever the price is and ask yourself, those two prices $2 by $2.10, which one do I want? Ask yourself the question, which one do I want? The difference of that bid ask is what the market maker keeps for their fee, their VIG for the putting the seller and the buyer together in that trade.

Volume tells us how many shares a day are traded on this stock. Ideally, in a perfect and great world I would not want to see anything under 1 million shares, and that’s my personal, bottom of volume is a million. I am okay for newer traders if they find stocks they like to go down and to maybe 750,000, but for me it’s a million, so that’s number two.

The first thing I want to say about it is you can’t trade everything. You’re not going to find the average person trading in Amazon at almost $2000 a share and trailing Sprint at $10 a share. You’re going to have a range of stocks that you’re comfortable with that you can afford to trade.