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Naked Puts: Make a Grand This Month With Options

These trades should generate $1,000 in monthly income ... but understand the risks of naked puts before you try

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Naked Puts: DirecTV (DTV)

naked-puts-directv-dtv-stockDirecTV (DTV) has always been one of my favorite stocks to use options to profit from. DTV stock is in very solid form with a good hold on market share for satellite TV both in the U.S. and Latin America. DTV stock has very reliable annual free cash flow in the $2 billion to $3 billion range. DTV stock has settled into stalwart status with reliable 10% annual EPS growth. Management under CEO Mike White is solid.

The stock is at $71.09, with the March 70 Put going for $1.67. You earn a 2.3% return, or about 19% annualized. You also get $1.09 margin for error because DTV stock trades above $70. Sell two contracts for $334 in income.

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