Hi there,I'd like to lock in profits from stocks and options. Where is it best to keep this money? Criteria: Looking for 6% annual and above- to counter inflation. Should be stable in case of a market drop.Thanks.Just to reclarify: Locking in profits FROM stocks and options. Ie. Cash in hand from equities, so where is best place to put them in? Thanks again.

You can't lock in rates of return with stocks, and especially not with options.Your best best is maybe a balanced fund of some kind that iswell diversified with stocks and bonds, from big and small companies and has investments in many segments.Remember what I said. YOU CAN NOT LOCK IN RATES OF RETURN WITH STOCKS AND OPTIONS.

The only way to lock in profits is to sell your holdings. I presume that is what you are talking about.Interest rates are currently well below 6%, so you're going to have a hard time finding something "stable" with that sort of a return. You can find bonds that will pay that much, but they will either have very long maturities (like 30 years) or be lower rated bonds with a higher risk of default. You may find safer bonds with a good return and a shorter maturity, but you will pay a premium price for them. That eats into your overall return.You will probably need to take on more risk to get your 6% or lower your goals and take less interested to get safety and stability.

I agree with the above poster, but think the explanation could use a little elaboration. Also, to counter inflation, you historically need a piddly 2-4% or so unless something goes awry.Lets go over what the basic options are and how they work. "call" options can be bought for a particular price and garauntee that, by their expiration date, you may a share for the strike price. An example: I buy a call option for FRO for 2.80, which allows me to buy a share for 40.00 sometime in the future. Im not obligated to buy the share, but I have the option to do so. Put options work in reverse- you have the right to sell a share at a specific price sometime in the future.So, how does one "Lock in" profits using options? Let say that you've bought PCLN for $80 and it bumps up to $85. While you think it may go up to 90, it might also go down to 70. So, you buy a put option for 85 and wait. If it does go down to 70, you dont lose anything and if it goes up to 90, you make more profits.You cannot use options to cement your profits for years to come. That isn't how the game works. You can make sure you don't lose profits you made, but you cant ensure profits unmade. If you are concerned about market drops, do not invest in the stock market. There is absolutely nothing (short of buying a put option everytime you buy a stock) you can do to prevent it from falling.So, where should you invest your money? Well, if you are just trying to counter inflation, T-Bills and CDs would be a good place. They are extremely stable and will protect you from inflation. If you still want to enter the market, I would recommended averaging yourself into an index fund. Right now, the markets are volatile (when aren't they?). So, put 10% of your money into an index fund this month, 10% more next month, and so on. That way, if the market drops, you still have money to buy at or near the bottom.Errr.. Index funds basically allow you to buy the entire market. It ensures that you do average- historically, 6-12%. Most mutual funds do worse than average after fees.