As investor, you will find out that dividend is one of income stream on your investing portfolio. The higher the dividend, the happier is the investor. But for trader, especially short term trader and call-option writer, there is more factor to be factored-in in order to maximize the profit or prevent lost. Why? That’s because of the typical behavior of the stock price during the “Ex-Dividend Date”.

Diversification is another concept that need to be really understood by all investor. By using diversification you are certainly reducing exposure to the risk of individual item. And this is a good thing to do. But on the other side of the coin, if you are using too much diversification, not only you induce additional transaction cost, but also you are limitting your profit that you could earn. Let’s found out exactly why and how it works

A stock trader can make profit basically by buying a company share at certain price and sell it at higher price. The problem is that no body can actually have the power to direct the price movement (go up or go down) except the market mechanism itself. So, what determine this ?

What is ‘instrument for trading’ ? For example: a car dealer buys cars from car company and sells to retail customer at higher price for their profit. Hence the instrument for this trading is car. So, “instrument” is just something that will be sold our bought during the trading activity.

This article will discuss the most common instrument for trading.