The nuts-and-bolts of a market strategy that can put thousands of dollars into your account each month

 

When the bubonic plague forced Londoners into their own version of quarantine-lockdown in the early 17th century, William Shakespeare used the time to write King Lear, Macbeth, and Antony and Cleopatra.

In 1665, as one of the last major outbreaks of the bubonic plague sent Cambridge University into another lockdown, Sir Isaac Newton used the time to begin to develop his theory of gravity.

Today, as the Coronavirus keeps most of us under lockdown, your old co-worker, Fred, is using the time to get super-awesome at Call of Duty: Warzone.

***Americans are bored … and we’re not using our time well

 

According to Comcast data, the average U.S. household is watching TV at least eight hours more per week.

That’s a full workday.

Overall, the average household is watching 66 hours of content per week. In other words, out of our seven-day week, we’re spending nearly three of those days doing nothing but watching HBO, or Netflix, or YouTube.

Oh, and according to Verizon, U.S. video game usage during peak hours has gone up 75%.

Bottom line — we’re bastions of productivity, and our mothers have never better prouder.

Well, here’s a novel idea if you’re stuck at home and bored …

***How about using this time to learn a market strategy that puts money in your pocket?

 

I won’t dance around what this strategy is, delaying the “big reveal.”

I’m talking about options.

Now, before you “x” out and go back to watching old reruns of The Office, here’s what’s in it for you …

Cash.

Ballpark 20%+ annual returns … in many types of market environments — even highly-volatile markets (volatility can actually help certain strategies) … and a way to buy world-class blue-chip stocks at discounts to current market prices — while getting paid to do it.

Curious?

I hope so. But odds are you might also read “options” and immediately think they’re either too complicated, or too dangerous.

The reality is that if you’re comfortable with 6th grade math, you’re overly-qualified to understand the numbers behind options, so you can cross off “too complicated.”

As to “dangerous,” well, they can be — absolutely.

But this danger is more reflective of the person rather than options themselves.

Think about your car. Used by a responsible adult, it’s an amazing tool that provides convenience, comfort, and mobility. Yet, when in the hands of a reckless teenager, that same vehicle could be a weapon.

It’s the same with options. By themselves, they’re not a problem. The danger comes when they’re used in a reckless manner.

The truth is that when you understand how to trade options wisely and effectively, they can be an invaluable addition to your market approach, helping you generate regular cash flows, even if the broader stock market is going nowhere.

***Out of respect for your television-binge-watching time, let me just jump straight to today’s punchline before we dive into more detail

 

Right now, our options experts, John Jagerson and Wade Hansen, editors of Strategic Trader, are offering an amazing deal …

You can begin to learn how to trade options for just $7.

That’s not a typo.

For less than the price of a cheeseburger, you can begin to learn a market approach you’ll be able to use for the rest of your life — one that can literally put thousands of dollars per month into your pocket month after month.

In today’s Digest, in a further effort to demystify options, I’m going to provide a top-line overview of how John and Wade use them to generate ballpark 20%+ returns in many types of market-conditions.

I believe you’re going to realize their strategy is far safer, and far more lucrative, than you’d previously thought.

***”The house” always wins … and how you can win by playing the role of the house

 

The stock market is full of gamblers … get-rich-quick dreamers who care little about the traditional pillars of safe investing — dividends, stable cash flows, and buying elite businesses at great prices. Instead, these gamblers want huge returns overnight.

They often approach the markets with a casino mentality. They’re not really investing, they’re betting — sometimes thousands (even millions) of dollars on hopes of “hitting it big.”

So, what’s one of their favorite ways of swinging for the fences?

Options.

Stock options are horribly misunderstood financial vehicles. The popular press, and perhaps even your own broker, may describe options as financial weapons of mass destruction. A foolish idea that’s certain to end in financial ruin. But that’s a woefully shortsighted generalization.

Yes, the way most gamblers use stock options increases their risk. Often, they’re putting their entire capital allocation on the line. So, if their bet goes bad — poof — that money is gone.

But John’s and Wade’s technique uses stock options to decrease the risk to their capital.

They do this by collecting the money others gamble away.

Basically, their strategy teaches you how to play the role of the house — while others are gambling, you’re the casino.

***The fundamentals of selling options for income

 

In simplest form, a stock option is simply an agreement between two investors. This agreement details the conditions in which these two investors might agree to a buy and sell a stock.

For instance, let’s say that Jim holds a big chunk of Microsoft in his portfolio. The company announces earnings soon, and Jim is worried about a miss. He fears Microsoft might sell off on the news. Perhaps he’s in some financial situation where he can’t afford a major drop in the value of his assets.

So, he finds Mary and offers her a deal … If Microsoft’s stock price falls below a set price (called a “strike price”) at any time within a specific time period, then Jim can sell his Microsoft shares to Mary for an agreed-upon price. Mary will buy those Microsoft shares for that price — even if Microsoft’s market price at the time is lower.

Basically, Jim is making a bet on Microsoft’s price dropping. As part of this, he’s just gotten himself an insurance policy.

Now, that’s obviously a good deal for Jim. But what does Mary get out of this?

Well, in exchange for making this deal (in which she plays “the house”), Mary receives cash from Jim, paid up-front, which she gets to keep — regardless of whether Microsoft’s stock drops or not.

That means if Microsoft comes out with positive earnings and the stock soars, it will never dip below the strike price. And that means Mary walks away from this deal with nothing but a new wad of cash in her pocket. Jim continues to own all his original Microsoft shares.

The option just described is a “put” option. And with John’s and Wade’s strategy, we play the role of Mary. We sell puts to other investors. This puts us on the hook to buy shares of stock under certain circumstances. In exchange, we are paid cash, up-front, as part of this deal.

Now, if you’re thinking “Hmmm … This could mean I might have to buy a stock at some point” then you’re right. And that leads us to a critical detail …

***John and Wade only make these deals on world-class companies, the type of market dominating stocks we’d want to own anyway

 

The premiums an investor might collect by selling puts on risky, highly-volatile stocks are usually much higher than the premiums on safe, steady blue-chip stocks, like Microsoft or Coca-Cola.

And this is where many investors are led astray. They see big dollar signs and forget about safety.

John and Wade avoid this by doing making a critical distinction …

They only sell puts on stocks that they’d be happy to own as pillars of a long-term buy-and-hold portfolio. For example, as I write, they have open trades on Nike, Microsoft, and Coca Cola, among others.

This type of dominant company usually holds the No. 1 position in their markets, rakes in huge amounts of cash … and often pays healthy, growing dividends. They rarely experience major declines (outside of black swan events, such as a global pandemic) … but on the occasions they do, it’s generally a temporary stumble — often great opportunities for long-term investors to step in and load up on bargain prices.

Think of it like this …

If you believe Microsoft is going to be a great long-term investment, you could buy it right now at today’s market price … OR … you could make a deal …

With this deal, you’ll buy Microsoft only if it sells off, say, 3% from its market price today. If it does, you’ll buy it at that lower price. In exchange for agreeing to buy at that cheaper price, you’ll earn cash, today. And you keep this cash regardless of what happens.

So, if Microsoft shares fall 3%, you buy this elite stock at a discount to today’s market price (with the premium in your pocket).

And if Microsoft doesn’t sell off? You just walk away with a wad of money.

That’s what makes this strategy so powerful. It provides smart investors lots of ways to win.

Compare that to so many other trading strategies that have only one way to win … and lots of ways to lose.

***Begin to learn all of this yourself, starting for just $7

 

This is just the tip of the iceberg. There’s so much more to learn …

How to find the trades offering the biggest (safe) returns … why “scary” markets often mean you make more money as an options-seller … how to turn around a trade that appears to have gone against you, and actually use it to make more money …

As mentioned at the top of this Digest, right now, John and Wade are opening the doors to their Master Class training service, offering their initial training video for just $7.

Here’s John on the thinking behind the low-price offer:

I don’t want you to pay a lot of money for something you haven’t even tried yet.

Why only $7?

Well, I’ve found that the fastest way to get people to be profitable traders is to give them a solid foundation based on what works in the options markets.

Tell them the truth and show them how the big institutions make money.

This gets folks thinking and acting in ways that will lead to success, before you make a single trade …

Once you master the fundamental secrets of the options market, someday soon you could treat your family to a first-class vacation … upgrade the house … or buy that sports car you’ve had your eye on.

Still on the fence?

You might think of it like this …

Spend $7 to become a journalist. Take the time to investigate. Learn more. Try to poke holes.

What you lose is nothing more than another episode of Tiger King.

But what you could miss through inaction is a powerful way to consistently earn 20%+ annualized yields with higher relative safety.

If you’re ready to learn more from John and Wade, just click here.

Have a good evening,

Jeff Remsburg