Researching the Stock
Though the process is more complicated with options, you can use the same type of research you use when you invest in equities. The kind of research you use is broken down into two principal types of analysis: fundamental and technical.
Fundamental analysis evaluates the company's management, sales and earnings record, products, debt ratio, competitors and other data that gives a good picture of the company and its historical performance.
Technical analysis investigates a stock's price and volume movements for the overall market, the market sector within which the stock resides, and the stock itself. Most investors use both types of analysis, the former to gain a comprehensive understanding of the company and the latter to determine an appropriate time to buy or sell.
Options involve risk and are not suitable for all investors. Detailed information on our policies and the risks associated with options can be found in Scottrade's Options Application and Agreement, Brokerage Account Agreement, and Characteristics and Risks of Standardized Options (available at your local Scottrade branch office or from the Options Clearing Corporation at 1-888-OPTIONS or by visiting www.888options.com). All option accounts require prior approval by Scottrade. Market volatility, volume, and system availability may impact account access and trade execution. Supporting documentation for any claims will be supplied upon request.