By Amber Hestla, ProfitableTrading
I’m fortunate to have spent time in the Army. Especially working in intelligence gathering.
If you’ve served, you know that one of the core beliefs of the Army is teamwork. You never leave anybody behind to fend for himself.
I apply this same thinking to the markets and life in general. I figured if I could learn and understand the markets, I could help my friends and family save for retirement and avoid catastrophic losses.
When I began applying my military training to the markets, I realized that I was in a unique position. I could use my analytical training to improve upon the most profitable investment strategies.
And that’s exactly what I’ve done.
I started researching and writing about options investing. I worked with expert stock traders and read countless books.
Before long, my work was featured in major trading publications. Technical Analysis of Stocks & Commodities, Stocks, Futures and Options (SFO) and a UK trading magazine called Shares all started publishing my work.
Soon, using options, I not only replaced the income from my previous military position, I exceeded it by 30%. And both my income and net-worth continue to grow to this day, thanks to my ability to spot hidden opportunities.
But most importantly, I’ve helped countless friends, family members and other traders understand how the markets work and how to make extra income using options. And don’t worry, if you’re not familiar with options, that’s okay. I use an entry-level options strategy that anybody can learn.
This has all been done through my premium advisory, Maximum Income, where my entire goal is to help traders generate extra income from their portfolio.
That means I am constantly on the hunt for ways to generate serious cash in this market.
I’m not talking about a few hundred bucks that you get once a quarter in dividends from shares of Exxon or GE. I’m talking about proven strategies that could help you rake in thousands every month.
So how am I doing this? Through an options strategy called covered calls.
Let me give you an example from one of my recent trades to show how it plays out in real life…
I sent an option-income alert to my readers. I told them about International Game Technology (NYSE: IGT). Most people have never heard of it, but it’s one of the leading providers of slot machines.
Based on my analysis, I saw a golden opportunity to generate income by applying my options-income strategy.
First, I recommended investors buy shares of IGT for $15.88 on June 17 (if they already owned shares, they didn’t need to buy more, as long as they held at least 100 shares). Based on 500 shares, this would have required a total investment of just $7,900.
Then, I told them to enter into a special agreement. I told them to agree to sell their shares if they hit $17 by July 19 — roughly a month later.
This would allow them to collect an immediate payment upfront…
Then, if the share price moved from $15.88 to $17 within a month, they would sell their shares and pocket the capital gains — in addition to the upfront options payment.
Let’s look at how the trade worked out.
My readers received an upfront payment of $290. That was the “premium” — the options payment I’ve been talking about.
Then, sure enough, within a month the share price began to rise. By July 19, the share price surpassed $17. My readers sold their shares, and locked-in an additional $560 in capital gains.
But that wasn’t all. While I held shares, IGT paid a dividend of $0.11 per share. That gave my readers another $55.
In all, between the premium, dividend and capital gains, this trade delivered a profit of $905 in a little over a month from just $7,900. Good for a return of 11.9% in 32 days — a stunning annualized return of 135.9%.
Now, you may be wondering, what if the share price hadn’t hit $17? What if it had ended up at, say, $16?
That’s just fine. If the share price doesn’t rise, you can collect more than one “options payment.” We would simply place another trade and collect more income, over and over again… every six weeks or so.
These premiums or “extra income” can amount to a few hundred or thousand dollars per trade.
So far my investors and I have collected an average options payment of $600, based on owning 500 shares per trade. Imagine what an extra $600 every few weeks could do for your portfolio or lifestyle.
Options & Income Strategist