In order to do that, a knowledge of stock options must be known.

How many people who invest understand options? Probably a small percentage, but it is a MUST to invest safely!

The only thing most people have knowledge of is to BUY Low and SELL High! In a down market they either lose their gains or go to cash. Both actions do not make any money when the market is going down. The market will go down, on an average, three times as fast and take 1/3rd the time it took to climb to the previous high level. Since this is so, why not have a good program for making money when the market goes down!

SPX Feb '07 - Jun '07.  The SPX is a mutual fund of 500 of the best stocks on the New York Stock Exchange.

This chart of the SPX shows that it took from the beginning of March 07 until July to reach its height but only a month to retrace. All that gain that was painstakingly gained was lost in one month. Would it not be better to have a method of determining the top and sell at that point and then have a method of making money while the market went down? The CompuCast program can determine the tops and bottoms and options will give you the ability to make money when the market goes up or down but also to protect the gains made with stock you do not want to sell.

Basically there are two types of options: CALL options and PUT options.

CALL options are insruments that give the owner the right, but not the obligation, to buy a stock at a (strike) price for a given length of time. These instruments can  be bought and sold like stocks. Lets say you bought a call option on the SPX in early March that gave you the right to buy SPX at a (strike) price at the prices shown in early March for six months. By the time SPX reached its high in July your option would have gone up quite a bit since you had the right to buy the SPX at the March prices. Sell the option before it expires and take the money! A strike price is the price at which you can exercise the option.

PUT options are instruments that give the owner the right, but not the obligation, to sell a stock at the strike price. These instruments can be bought and sold like stocks. Lets say in July your program suggested that you were at a market TOP. You buy a SPX put to sell your SPX stock at a strike price that is at or near the market price. When the market goes down in the next month, you still have the right to deliver the stock at the higher (strike) price, so you made money when the market went down. Using this method you can buy a put for any good stock you own and do not want to sell and while the stock is losing money your option is making money.

When you determine that a bottom is at hand, then close the put (sell) and use the money to buy more of your stock, which is now cheaper. This way over time you will increase your number of shares while the stock goes up and down in tune with the market.

For more education on options get on the internet and type in the search area 'options industry council'.and explore their information.