I am currently reading about investing in options. The first book I read, even though it was marked “for beginners,” was extremely hard to understand. The writing style isn’t wonderful and the author really doesn’t explain the key words to option trading. After snooping around the internet, I found some great resources that educate the real beginners to online option trading.

Investopedia has a great novice course that explains what option trading really means. When I first started reading about options, I thought it was highly speculative. But after some further investigation there is some sense to the madness they call option trading. There are two types of options that you can either buy or sell. I will only talk about one kind because I don’t fully understand the other yet. A call option is when you have the right, but with no commitment to purchase a stock at a certain strike price.

Now how can this be a rewarding opportunity for young people in their investment nest eggs? High returns with less money being involved. Here is a quick example (I will be covering more about this subject later on).

Let’s just say you have the option to buy a stock like Circuit City at a strike price of $27.50. Currently Circuit City is selling at 24.18. The break-even point for this option would be 28.65 (27.50 + the cost of the premium; which will be $1.15 for this example). But all you have to invest is $115 dollars “A stock option contract is the option to buy 100 shares; that’s why you must multiply the contract by 100 to get the total price.”

You’ve just gained nearly 300% on a stock deal! Pretty nice eh? BUT! Huge BUT.. The first thing I learned about options is you do not want to invest any money you are willing to completely lose. Educating yourself as much as possible before purchasing options will drastically help your chances for turning a profit.

The investment game that eFIPO.com will be introducing in January will allow option trading; which will definitely help you learn about them. So you can buy all the options you want with no risk! When I start getting into buying options in May, I will have enough knowledge to limit my risk. Like I said before registering for the game will be free and extremely rewarding (cash prizes!).

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Index Fund

A portfolio of investments that is weighted the same as a stock-exchange index in order to mirror its performance.

This process is also referred to as “indexing”. Investing in an index fund is a form of passive investing. The primary advantage to such a strategy is the lower management expense ratio on an index fund. Also, a majority of mutual funds fail to beat broad indexes such as the S&P 500.

More words from Investopedia.

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(If you didn’t know, Freddy Kruger was a child molester and looked what happened to him!)

I was recently reading an article on a man in California that pleaded guilty for molesting two children while he was pretending to be a janitor at a local elementary school. Pretty much the gist of the article was that a few lawyers that are involved in the ACLU are trying to say that he should not have a sign in his front lawn saying he was a convicted child molester because that is against his civil rights.

***My thoughts*** When you molest a child or anyone you left your rights at door and deserved to be punished. They are one of the reasons why neighborhoods can’t leave their doors unlocked anymore. I remember growing up where everyone on the street had an open door policy. Recently, I participated in a political campaign and when people answered the door, they were extremely fearful (even though it was in the middle of the day, and I don’t think I’m too intimidating.)

Do you think that when you cross the line of what is morally right and wrong; you should lose some of your civil rights or continue to have the same as others as if nothing happened?

***My thoughts*** Well first thing. I don’t think having a sign in front of the person’s house is cruel. The reason why they have the sign in front of their house is cruel. There needs to be stricter laws against these kinds of molesters so we can have safe neighborhoods like back in the day. I think it was a great idea to create sites like ChildSafeNetwork to show where past child molesters live.

Do you think there should be stricter laws against molesters or looser laws because everyone makes mistakes?

What do you think?

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Hedge Fund

An aggressively managed portfolio of investments that uses advanced investment strategies such as leverage, long, short and derivative positions in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark).

Legally, hedge funds are most often set up as private investment partnerships that are open to a limited number of investors and require a very large initial minimum investment. Investments in hedge funds are illiquid as they often require investors keep their money in the fund for a minimum period of at least one year.

For the most part, hedge funds (unlike mutual funds) are unregulated because they cater to sophisticated investors. In the U.S., laws require that the majority of investors in the fund be accredited. That is, they must earn a minimum amount of money annually and have a net worth of over $1 million, along with a significant amount of investment knowledge. You can think of hedge funds as mutual funds for the super-rich. They are similar to mutual funds in that investments are pooled and professionally managed, but differ in that the fund has far more flexibility in its investment strategies.

It is important to note that hedging is actually the practice of attempting to reduce risk, but the goal of most hedge funds is to maximize return on investment. The name is mostly historical, as the first hedge funds tried to hedge against the downside risk of a bear market with their ability to short the market (mutual funds generally can’t enter into short positions as one of their primary goals). Nowadays, hedge funds use dozens of different strategies, so it isn’t accurate to say that hedge funds just “hedge risk”. In fact, because hedge fund managers make speculative investments, these funds can carry more risk than the overall market.

More words from Investopedia.

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Want FREE MONEY!?! I will be adding some big time changes by the New Year, January 1^st, 2007. The first thing I will be introducing is the making money in stock program. This will be a 100% free to anyone that participates and receives real money (gift cards) when you win! You will have to sign up with MarketWatch and join the game that I create around March 1^st. At the end of each quarter (other than the last quarter) the person with the highest amount of money in their portfolio will receive a $25 gift card. The winner of the last quarter will receive a $100 dollar gift card!!! The only way I will be able to honor these programs is if we have enough people signing up to join the investment group; WHICH IS FREE!

I will also be introducing a podcast which will deal with financial and political issues. I will be asking people to talk about finances and debating on politics and other issues surrounding the world and this country. I think this will be a lot of fun, and we will get to hear the opinions of people all around N. America. When this add-on ends up happening, you can send me an email to be invited to participate in one of the podcasts.

The last thing I will be adding is a totally up to you! I need your comments and support on this one. I will be giving away a book to the winner. The winner will receive one of my favorite books “The Automatic Millionaire : A Powerful One-Step Plan to Live and Finish Rich.” The person that gives me the best idea of an add-on to eFIPO will receive this free book. You can either leave a comment under this post (and a few others) or email me.

All of these add-ons require a lot of reader participation. I need to hear what you think about the add-ons and what to know whether or not you feel like these add-ons will be worth it or not. I will update people on a weekly basis (probably) on the progress towards the inclusion of these programs.

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Going Public

The process of selling shares that were formerly privately held to new investors for the first time. Otherwise known as an initial public offering (IPO).

When a company “goes public,” it is the first time the general public has the ability to buy shares.

More words from Investopedia.

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Wenchypoo presents Lost: Simple Basic Yard Sale posted at Mental Wastebasket, saying, “…and local politics as far as yard sales go.”

Micah Redding presents Can Musicians Have Opinions? posted at The Redding Brothers, saying, “Format Style: politics & pop culture”

Remember to comment on the articles you like!

National Politics

Jack Yoest presents Political Campaign as Marketing Campaign posted at Reasoned Audacity

Wenchypoo presents The Politician Primer (L-O-N-G) posted at Mental Wastebasket.

Jack Yoest presents Carl Cameron Interviews Charmaine on FOX posted at Reasoned Audacity

Other

Wenchypoo presents “Help! I’ve Fallen and Can’t Reach My Microwave B… posted at Mental Wastebasket, saying, “Re: social policy and its farce.”

Riversider presents Canterbury Hall Squatters - Highlighting Community Facilities Under Threat posted at Save The Ribble!.

Kevin presents A Common Sense, Low-cost Solution to Illegal Immigration posted at Political Dishonesty

Political Parties

Wenchypoo presents Midterm Elections and Your Wallet posted at Mental Wastebasket.

Wenchypoo presents Utopia Crashes to Earth posted at Mental Wastebasket.

That concludes this edition. Submit your blog article to the next edition of young politics using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: young politics, blog carnival.

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FICO Score

A standard credit score which makes up a substantial portion of a credit report that credit bureaus sell to lenders so they can asses an applicant’s credit risk and whether to extend them credit.

It is an acronym for the creators of the FICO score, Fair Isaac Credit Organization.

Using mathematical models, the FICO score takes into account various factors in each of these five areas: payment history, current level of indebtedness, types of credit used and length of credit history and new credit in determining credit risk.

More words from Investopedia.

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Today I was shopping with my girlfriend for her new Mac. Only a select amount of retailers have them, so we had to either go with CompUSA or the Mac store. I told her we should just go to the CompUSA because they won’t be as crowded as the Mac store downtown.

When we walked into CompUSA we were greeted and headed our way to Mac part of the store. After looking for about two minutes we were greeted again from a salesman in the computer area. He was very knowledge and we discussed why Mac’s kill PC’s. The Mac display was incredible and after looking at them for about five minutes you know why Mac’s stock performs so well.

The salesman was just completing his sales pitch when we started to talk about where he used to work prior to CompUSA. I discovered that we both worked at Best Buy at two different times. Best Buy does not have a kind place in my heart after working there for a year and half (even though I own their stock). We told horror stories about how Best Buy treats their employees and I told him about a website dedicated on the pure hatred of Best Buy. This discussion got me thinking how a great company like CompUSA and Circuit City is losing to their giant rival Best Buy.

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These are eFIPO’s picks for finance & politic blogs of the week.

eFIPO’s Feature Finance Blog

The Simple Dollar – Financial talk for the rest of us. If you want to find some good financial advice and some great technical explanation, The Simple Dollar might be the site for you. Updates it daily with good content and doesn’t really have any filler articles. Visit The Simple Dollar and start looking at finances from a different angle. The article I liked from him this week- Facing My Financial Fears: Buying A Home.

eFIPO’s Primary Politics Blog

Pro’s & Con’s – Conservative Thought. Liberally Applied. There’s nothing better than a good debate website such as this. The site is updated on a nearly daily basis so it follows politics very closely. I’ve been reading this site for a couple of months now and if you like to discuss your point of views against a conservative thinker go to Pro’s & Con’s. Favorite article of the week- Stories that surprise people but should not

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