Get Rich - Stay Rich - Investing for Monthly Income

From $5K to $1 Million By Selling Options

Many investors ask me how much money is require to start investing and to become a millionaire. As we all know from our simple start in life, you can grow from a humble beginning to achieving financial success and independence. This is what we focus on with our monthly income trades with subscribers. Here is a recent headline from a CNBC interview with Ron Baron:

Any patient investor can turn $5,000 a year into nearly $1 million, says billionaire investor Ron Baron. “You have to have a small amount of money and invest it regularly for a long time,” Baron says. “It’s all about compounding,” the Baron Capital founder says, referring to the power of making regular investments and reinvesting the returns.

You have undoubtedly heard it said before – compounding returns is the eighth wonder of the world or man’s greatest invention. But to an investor it is a great wealth builder. While many income investors think of compounding dividends, this can also be accomplished by option sellers by compounding the option premium received by selling either put or call options. I think about the premium received as soon as the option is sold can be readily reinvested or compounded immediately.

Here is the formal definition from Investopedia:

Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan. Compound interest can be thought of as “interest on interest,” and will make a deposit or loan grow at a faster rate than simple interest, which is interest calculated only on the principal amount. The rate at which compound interest accrues depends on the frequency of compounding; the higher the number of compounding periods, the greater the compound interest.

The “Rule of 72” is an easy way to calculate how long it will take to double you money based on compounding returns. For example, an investor has a dividend stock paying an annual 5% dividend. Using the rule of 72, dividing 72 by 5 indicates the investor will double his money in 14.4 years. Not bad for a dividend producing asset. Now, let’s compare this to selling options. If you make 2% per month on average, you can double you money in 36 months (72/2=36). This is only 3 years compared to 14.4 years for the 5% dividend stock! Which investment do you want to pursue?

This is the theory behind our strategy to sell puts and covered calls at get rich investments. We can generate consistent income on a monthly basis that will provide us the opportunity to compound our money and returns at a faster pace than the buy and hold dividend investing.

Learn how to compound your money and the best stocks to use in this strategy to move from $5,000 to $1 million.

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You Can Help End Poverty

New Income trade for 130% Annualized Return

Income Opportunity for 130% Option Trade
As income investors, we seek to create consistent monthly income by selling options to collect monthly premiums.  This has been successful for our investors for years.  Option selling offers another method to diversify investing strategies beyond traditional dividend investing.  We have combined technical stock events with our strategy to identify high returns option selling opportunities. This income trade will generate a return of more than 130% annualized.
 
Stock:  Zumiez (ZUMZ) is a leading specialty retailer of apparel, footwear, accessories and hardgoods for young men and women who want to express their individuality through the fashion, music, art and culture of action sports, streetwear, and other unique lifestyles. As of October 28, 2017 it operated 694 stores, including 604 in the United States, 51 in Canada, and 32 in Europe and 7 in Australia. ZUMZ operates under the names Zumiez, Blue Tomato and Fast Times.
ZUMZ announced that total net sales for the four-week period ended October 28, 2017 increased 10.0% to $61.5 million, compared to $55.9 million for the four-week period ended October 29, 2016. The Company’s comparable sales increased 6.6% for the four-week period compared to a comparable sales increase of 10.2% in the year ago period.
 
Earnings Per Share (EPS) was up 49% compared to the same quarter in the prior year. This tells us the company increased earnings and/or decreased the number of shares.
Return on Equity (ROE) is 8.01% for the latest twelve months. This reflects how efficient the company has been at turning a profit on the money shareholders have invested.
Chart: We have detected a “Symmetrical Continuation Triangle (Bullish)” chart pattern formed on ZUMZ. The stock’s price has broken upward to confirm a classic chart pattern, offering a target price for the intermediate-term in the range of 21.00 to 21.70 for a 19% price increase
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Option Basics – Option Strike Prices

Income investors need to know about option strike prices to optimize their trades. Here are some basics…

Stock option strike prices are the price stated on each call or put option.  The strike prices can be classified according to their relationship with the current stock price.  There are three categories:

  • In the money (ITM) defined as calls with strike prices below stock prices and puts with strike prices above stock prices;
  • At the money (ATM) defined as the call and put strike price at or near the stock price;
  • Out of the money (OTM) defined as calls with strike prices above the stock price and puts with strike prices below the stock price.

As you know, an option will move from category to category based on its relationship with the actual stock price movement.  For example, when a stock is trading at $50 the the $50 strike prices will be at the money.  When the stock price moves above $50, calls will be ITM while puts will be OTM.  Likewise, when the stock price falls below $50, then calls will be OTM and puts will be ITM.  Therefore, the category is totally dependent on the current stock price.

OTM options expired worthless while ITM will always be exercised by the holder because they still have a value at or near the expiration date.  When a stock option is exercised, the call holder buys the stock and the put holder sells the stock.  When options are exercised, the OCC decides to which brokerage firm the option will be assigned and the brokerage decides which customer will get the assignment. When you are assigned an exercise, those shares are said to have been called away or called out.

When stock options are American style, you can be assigned an exercise anytime the option is ITM.  Of course, early exercise is affected by the time value remaining on the option.  As time value begins to decline more rapidly as expiration nears, the holder is more likely to assign an ITM option.  In general, 10% of options are exercised, 60% are traded out and 30% expire worthless.  

 

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Income Trade for 45%

As income investors, we seek to create consistent monthly income by selling options to collect monthly premiums. This has been successful for our investors for years. Option selling offers another method to diversify investing strategies beyond traditional dividend investing. We have combined technical stock events with our strategy to identify high returns option selling opportunities. This income trade will generate a return of 45% annualized. We are coming off great trades such as RES and STM.

Stock: Gaslog (GLOG) is an international owner, operator and manager of liquefied natural gas (LNG) carriers. The Company provides support to international energy companies as part of their LNG logistics chain. The Company’s owned consolidated fleet consists of 27 LNG carriers, including 22 ships in operation and five LNG carriers on order.

Trend: We have detected a “Continuation Diamond (Bullish)” chart pattern formed on GasLog Ltd (GLOG). This bullish signal indicates that the price may rise from the close of 17.45 to the range of 22.00. The pattern formed over 244 days which is roughly the period of time in which the target price range may be achieved. GasLog Ltd has a current support price of 16.80 and a resistance level of 17.60.

Strategy: We have an opportunity to sell options for income with GLOG as the stock should trade higher in the coming weeks. I recommend to place your trade and exit when you have locked in profits due to the stock price moving higher. Our goal here is to make income short term so we can exit and compound capital into another trade.

For medium risk option trade, look to sell an November 2017 17.5 PUT for about $1.00. This creates a return of 6.0% with 49 days to expiration. This is an annualized 45% return.

For a conservative trade, you can setup a covered call trade. You can purchase 100 shares of RES and sell an November 17.5 CALL option for about $0.80.

We continue to identify winning option trades to generate income and to exit early as the stock bullish patterns moves prices higher.

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Option Income Trade for 43.6%

As income investors, we seek to create consistent monthly income by selling options to collect monthly premiums. This has been successful for our investors for years. Option selling offers another method to diversify investing strategies beyond traditional dividend investing. We have combined technical stock events with our strategy to identify high returns option selling opportunities. This income trade will generate a return of 43% annualized. We are coming off a great trade in STM for a 40% gain.

Stock: RPC, Inc. (RES) provides a range of oilfield services and equipment for oil and gas companies involved in the exploration, production, and development of oil and gas properties in the United States, Africa, Canada, Argentina, China, Mexico, Eastern Europe, Latin America, and the Middle East. The company operates in two segments, Technical Services and Support Services.

Trend: We have identified a bullish “Upside Breakout” chart pattern. This bullish signal indicates that the stock price may rise from the close to the range of $25. The faster moving average recently crossed above the slower moving average, signaling a new uptrend has been established. The PMO supports the uptrend price movement.

The MACD is above its signal line and positive. The configuration is positive. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at 19.54 and 20.12). RPC Inc is currently trading near its 52 week high reached at 23.36 on 25/01/17.

Strategy: We have an opportunity to sell options for income with RES as the stock should trade higher in the coming weeks. I recommend to place your trade and exit when you have locked in profits due to the stock price moving higher. Our goal here is to make income short term so we can exit and compound capital into another trade.

For medium risk option trade, look to sell an October 2017 22 PUT for about $0.90. This creates a return of 4.3% with 36 days to expiration. This is an annualized 43.6% return.

For a conservative trade, you can setup a covered call trade. You can purchase 100 shares of RES and sell an October 22 CALL option for about $1.10.

We continue to identify winning option trades to generate income and to exit early as the stock bullish patterns moves prices higher.

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Selling Puts for Monthly Income

When you buy an option, you are hoping for a move in the stock based on a chart or event or your brother-in-law’s advice (bad move there).  Hopefully, you watch the option move up and then — when greed, fear or satisfaction set in — you sell and make a profit.  Or you watch it go down and either have an automatic stop loss in to sell it when it hits a certain level or, like most traders, you keep your fingers crossed and hope for the best … until the pain of losing on paper is greater than the fear of losing real money and you sell at a loss.

In a recent survey, results showed three out of four options traders still trade this way.  Accordingly, the same survey showed that three out of four options expired without being exercised or with any value.   And yet, the traders who took the “sell” side of the trade put money in their pocket on Day One of their trades, every single time.

Selling is a low-risk option strategy and a low-risk way to generate high monthly income and a great entry point to purchase stock at a lower price.

Here are several things to consider:

When you sell an option, you are collecting the cash up-front.  You are already ahead.

When you sell an option, you are transferring risk to the buyer.  Yes, when you sell options, you assume some risk but not to your capital.

This cash you collect upfront gives you the ability to manage the position – you have cash in hand to “close” or buy back the put or call, at a profit or loss, without using any or a good deal more capital.  This enables you to conserve capital, the basis for regular monthly income.

And accepting cash enables you to create targets for your positions.   The sum of these targets, when set properly, gives you a target income for the month … and that is what this is all about.

And selling puts let’s you decide the entry price when buying stock.  For example, you can sell a put to purchase a stock that you will sell covered calls against when it is put to you.  Then, you sell monthly calls until the stock is called away.  Then, back to selling monthly puts to re-enter the stock.  Rinse and repeat!  Over and over in the stocks that you want to generate monthly income.

Selling puts is actually a bullish tool.  The advantage to selling puts over buying calls is evident in the math:  The odds of winning are significantly increased.  Many professional traders use the short put strategy to buy stocks at prices they want.  Nobody wants to pay the highest prices to own shares, but when the stocks pull back – and stocks always pull back – the market helps you to get in at a better price.

But what if you don’t want to buy the stock?  Don’t sell puts on stocks you wouldn’t want in your portfolio.  You will get taken out of the trade if the buyer wants to exercise their rights (to “put” stock to you at the option’s strike price), and those are the kind of stocks you probably want to own!

This is always the risk with short puts, but it’s hard to call it a “downside” when you end up owning a good stock at a great price.  Besides, even if you are assigned to take possession of the shares, you can always sell them on the open market.  In fact, you can often get out for a better price and, thus, a profit … and repeat the strategy, if you choose.   Better yet, if the stock goes up and your put gets assigned, just sell a covered call against the shares and you’ve just established a new position in your portfolio — and another way to profit!

We are focused on generating consistent monthly income by selling options for premium using low risk strategies. You can get FREE trades at getrichinvestments.com

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Income Opportunity for 40% Option Trade

As income investors, we seek to create consistent monthly income by selling options to collect monthly premiums. This has been successful for our investors for years. Option selling offers another method to diversify investing strategies beyond traditional dividend investing. We have combined technical stock events with our strategy to identify high returns option selling opportunities. This income trade will generate a return of 40% annualized.

Stock: STMicroelectronics N.V., (STM) together with its subsidiaries, designs, develops, manufactures, and markets semiconductor products, and subsystems and modules worldwide. STM has strengthened its ecosystem through a Partner Program that connects customers with qualified technical specialists capable of strategically supporting their projects.

We have identified a bullish “Continuation Diamond” chart pattern. This bullish signal indicates that the stock price may rise from the close of $17.44 to the range of $20. The pattern formed over 114 days which is roughly the period of time in which the target price range may be achieved, according to standard principles of technical analysis.

STMicroelectronics has a current support price of 17.04 and a resistance level of 17.46 that has been broken this week.

A Continuation Diamond (Bullish) is considered a bullish signal, indicating that the current uptrend may continue. Prices create higher highs and lower lows in a broadening pattern, then the trading range gradually narrows after the highs peak and the lows start trending upward. The technical event occurs when prices break upward out of the diamond formation to continue the prior uptrend, which confirms the pattern.

Monthly Income Option Trade

Strategy: We have an opportunity to sell options for income with STM as the stock should trade higher in the coming weeks. I recommend to place your trade and exit when you have locked in profits due to the stock price moving higher. Our goal here is to make income short term so we can exit and compound capital into another trade.

For medium risk option trade, look to sell an October 2017 17.5 PUT for about $0.80. This creates a return of 4.8% with 6 weeks to expiration.

For a conservative trade, you can setup a covered call trade. You can purchase 100 shares of STM and sell an October 17.5 CALL option for about $0.80.

We continue to identify winning option trades to generate income and to exit early as the stock bullish patterns moves prices higher.

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Income Trade Opportunity for 12% in 28 days

As income investors, we seek to create consistent monthly income by selling options to collect monthly premiums. This has been successful for our investors for years. Option selling offers another method to diversify investing strategies beyond traditional dividend investing. We have combined technical stock events with our strategy to identify high returns option selling opportunities. This income trade will generate a return of 12% return.

Stock: Spark Therapeutics, Inc. (ONCE) is a gene therapy company. The Company focuses on treating orphan diseases. It has a pipeline of product candidates targeting multiple rare blinding conditions, hematologic disorders and neurodegenerative diseases. Its pipeline includes a product candidate targeting choroideremia (CHM), which is in a Phase I/II clinical trial and a product candidate for hemophilia A, which is in a Phase I/II clinical trial. Its product investigational candidate, voretigene neparvovec, is intended to treat a genetic blinding condition or inherited retinal disease (IRD).

We have identified a a pattern called Flag (Bullish), providing a target price for the short-term in the range of 90.00 to 93.00 on Spark Therapeutics (ONCE). The faster moving average recently crossed above the slower moving average, signaling a new uptrend has been established.

A Flag (Bullish) is considered a bullish signal, indicating that the current uptrend may continue. After a steep rise in price, the pennant reflects a temporary pause in the uptrend, consisting of two parallel trendlines that form a rectangular flag shape.

Spark Therapeutics announced on August 9 the closing of the previously announced underwritten public offering of its common stock pursuant to an automatically effective shelf registration statement that was previously filed with the Securities and Exchange Commission, including the exercise in full by the underwriters of their option to purchase an additional 690,789 shares from Spark at the public offering price of $76.00 per share, less the underwriting discount. The exercise of the option brought the total number of shares sold in the offering to 5,296,053, and increased the aggregate net proceeds to Spark to approximately $380.4 million, after deducting underwriting discounts and before offering expenses.

Strategy: We want to sell a covered on ONCE using the September 2017 80 Call. For each 100 shares of ONCE stock you buy, sell one Sept 80 PUT for a $3.50 credit or better. Your cost of the trade is ~$71.75 or so on a stock currently trading above $75 per share. That’s potentially a 11.5% return in 28 days for an assigned trade.

This is a great example of how investors can create monthly cash from these income producing strategies. This is an excellent way to create a side hustle income without consuming too much of your time each day. For others, they have built an income large enough to live on without being employed by the man. When your monthly income exceeds your living expenses, you have achieved financial independence.

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How We Made 100% in a Month

In our income newsletter, we focus on creating monthly income by selling options to collect premium. we like to focus on high quality stocks with stable earnings and price movements. To boost our income, we will add a few trades with technical analysis confirmation when we see an opportunity in a high return trade. This has created several winners in the past month. We made 12% in a 40 day trade which equates to over 100% on an annual basis.

We published our blog post on CF Industries (CF) on July 10. This stock had formed a diamond bottom pattern (Bullish), providing a target stock price for the short-term above $30 per share. The trade was:

CF is currently trading at $27.89 per share. We want to sell a cash-secured put option on CF using the August 2017 30 Call. For each 100 shares of CF you want to control, sell one August 30 PUT option for a $3.00 credit or better. That’s potentially a 12.0% assigned return in 40 days.

Since the trade was shared with Monthly Income subscribers, CF is trading at $30.50 –rising above the $30 price target. The stock maintained its stock price even with the recent market pullback due to the Korean Crisis. These trades allow investors to compound their money to continue to grow their income.

We continue to produce monthly income through covered call and cash-secured PUT trades. We don’t find gems like this one every day, but they make for a successful investing and wealth creation. Using these strategies, investors can easily add $1000s of income each month. For some, they have built an income large enough to live life on their terms. When your monthly income exceeds your living expenses, you have achieved financial independence.

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Monthly Income from Option Trade

Income Trade Opportunity in JP Morgan (JPM)

For subscribers, we have been selling puts on JP Morgan (JPM) for several months. We consider this a perpetual income play by selling options for monthly premiums. In fact, we have collected over $1500 in monthly cash during the past 6 months! This is a great way to create investing income that exceed the typical dividend strategy.

As income investors, we seek to create consistent monthly income by selling options to collect monthly premiums. This has been successful for our investors for years. Option selling offers another method to diversify investing strategies beyond traditional dividend investing. We have combined technical stock events with our strategy to identify high returns option selling opportunities. This income trade will generate a return of 13% annual return.

Stock: JPMorgan Chase & Co. operates as a financial services company worldwide. It operates through Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management segments.

We have identified a “Continuation Diamond (Bullish)” chart pattern formed on JPMorgan Chase & Co (JPM on NYSE). This bullish signal indicates that the price may rise from the close of 93.11 to the range of 105.00 – 107.00. The pattern formed over 143 days which is roughly the period of time in which the target price range may be achieved.

JPMorgan Chase & Co has a current support price of 91.28 and a resistance level of 93.19.

The RSI is above its neutrality area at 50. The MACD is positive and below its signal line. The stock could retrace in the short term. Moreover, the stock is trading above both its 20 and 50 day MA (respectively at 92.13 and 89.17). JPMorgan Chase is currently trading near its 52 week high reached at 94.51 on 06/07/17.

Strategy: We want to sell a cash secured put on JPM using the September 2017 92.5 PUT. For each 100 shares of JPM stock you buy, sell one Sept 92.5 PUT for a $1.35 credit or better. That’s potentially a 1.5% return in 41 days or 13.3% annualized return compared to a 2.1% annual dividend yield.

For investors wanting to take a long position in JPM, this lowers the stock price for entry as each premium received lowers your initial cost basis. You can continue to sell monthly put options until the stock is put to you. Then, you can sell covered calls each month for additional monthly income. And, you collect the stock dividend.

This is a great example of how investors can create monthly cash from these income producing strategies. This is an excellent way to create a side hustle income without consuming too much of your time each day. For others, they have built an income large enough to live on without being employed by the man. When your monthly income exceeds your living expenses, you have achieved financial independence.

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