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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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The Dirty Little Secret of Option Trading

secret-to-option-selling

Options are a like a ticking time bomb in your hand.  If your preferred method of trading options is to buy calls and puts, that’s like telling the market to just take your money and pay you back “someday, maybe … if you feel like getting around to it.”

The truth is, every second you own that option contract is like the second hand of a bomb counting down to zero… blowing up into a useless piece of paper.  Why would anyone want to trade options when the deck is stacked against them?  Most options traders think of buying options as having “Stocks on Steroids” in their trading accounts.  The sad reality is, they continue to cling to that hope, even while they continue to lose money . . . trade after trade (after trade…).

What Happens to All Those Losing Trades, Anyway?

You know that for every option trade, there are two sides.  Buyers can’t buy without sellers.  If the options you buy aren’t making you money, you can be certain that the sellers are PROFITING CONSISTENTLY from your losing trades.  It’s time to turn the tables … literally. When you move to the other side of the trade, you put those odds squarely back in your favor.  That’s how the pros trade . . . taking your money every single time you buy a call or a put.  But by becoming an option seller, too, you will understand why the pros prefer their strategy. For starters, you’ll probably quickly get addicted to collecting COLD, HARD cash upfront on every trade.

And, the “secret” to selling options is that you enter a trade that has a 99% chance of winning. They’re practically GIVING MONEY AWAY on the exchanges. It’s true – the market pays you to make your trades!  Not quite sold on selling yet?  If watching your account grow practically on command isn’t enough, let’s look at how simple it is to keep the returns flowing in. …

Generate a Paycheck for Life …

You can sell option contracts again and again and again … for as long as you need or want to collect a monthly “bonus” without working harder — or at all!  Consider this . . .You could continue to fight the system and trade options in hopes of the next big MONSTER TRADE (the lottery ticket).  Or, you COULD pay yourself FIRST – bringing in $500 each week (or more).  Why not turn the tables in your FAVOR . . . and sell options like a PRO?  Stop trying to hit home runs by “buying options,” and start hitting singles and doubles to score more runs over time.

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Income Trade Opportunity in Nexstar Media

We have a new option trade for monthly income to share with subscribers. I have decided to take early profits on the CF trade as it moved above my $30 target price today for a great income in only 10 days. I will take early profits so I can continue to compound my capital be entering new trades.

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 5.8% using the forward month options.

Stock: Nexstar Media Group, Inc. (NXST) operates as a television broadcasting and digital media company in the United States. It focuses on the acquisition, development, and operation of television stations and interactive community Websites in medium-sized markets. The company will report earnings on August 8.

A “Symmetrical Continuation Triangle (Bullish)” chart pattern formed on Nexstar Media Group Inc (NXST). This bullish signal indicates that the price may rise from the close of 61.75 to the range of 73.00 – 76.00. The pattern formed over 55 days which is roughly the period of time in which the target price range may be achieved.

A Symmetrical Continuation Triangle (Bullish) is considered a bullish signal, indicating that the current uptrend may continue. The formation occurs because prices are reaching both lower highs and higher lows. The technical event occurs when the price breaks out of the triangle formation to close above the upper (descending) trendline, thereby confirming the pattern.

The RSI is above 50. The PMO is above its signal line and positive. The PMO is breaking above its zero level to indicate further upside. Moreover, the stock is above its 20 and 50 day MA (respectively at 60.04 and 59.91).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Strategy: We want to sell a covered call on NXST using the August 2017 65 Call. For each 100 shares of NXST stock you buy, sell one August 65 covered call option for a $61.45 ($63.25 – $1.80) debit or better. That’s potentially a 5.8% assigned return with a 3.0% downside protection. If you want more downside protection, you can purchase an August 60 PUT for less than $0.25 per option.

For PUT writers wanting to lower their cost of entering this position. You can sell a August 65 PUT option for $3.70. That’s a potential return of return of 6.0%.

Investors should consider taking profits early as the stock price moves higher toward the $65 option strike price and exit if there is a pull back below support levels. You can use the PCD strategy if you want to use this stock for Monthly Income.

This is a higher risk trade than we normally place in the Monthly Income Report. However, this is a nice setup with a positive merger announcement, positive technical confirmation and increased premium from selling options for income.

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Great Income Trade Opportunity in HEES

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 above 8% using the forward month options.

Stock: H&E Equipment Services, Inc. (HEES) operates as an integrated equipment services company. The company rents, sells, and provides parts and service support for hi-lift or aerial work platform equipment, cranes, earthmoving equipment, and industrial lift trucks. It offers heavy construction and industrial equipment for rent on a daily, weekly, and monthly basis

A “Double Bottom” chart pattern has been detected on H&E Equipment Services Inc (HEES). This bullish signal indicates that the price may rise from the close of 21.90 to the range of 25. The pattern formed over 46 days which is roughly the period of time in which the target price range may be achieved. H&E Equipment Services Inc has a current support price of 19.89.

Strategy: We want to sell a covered call on HEES using the August 2017 22.5 Call. For each 100 shares of HEES stock you buy, sell one August 22.5 covered call option for a $20.70 ($21.90 – $1.20) debit or better. That’s potentially a 8.7% assigned return with a 5.8% downside protection. If you want more downside protection, you can purchase an August 17.5 PUT for less than $0.25 per option.

For PUT writers wanting to lower their cost of entering this position. You can sell a August 22.5 PUT option for $2.00. That’s a potential return of return of 8.9%.

Investors should consider taking profits early as the stock price moves higher toward the $25 target price and exit if there is a pull back below support levels..

This is a higher risk trade than we normally place in the Monthly Income Report. However, this is a nice setup with a positive merger announcement, positive technical confirmation and increased premium from selling options for income.

H&E Equipment Services to Acquire Neff Corporation to Create Leading Equipment Rental Company

The acquisition will nearly double the number of H&E branches, from 78 to 147, within H&E’s existing footprint in the strategically important Gulf Coast, Mid-Atlantic, Southeast and West Coast regions. Both H&E’s and Neff’s customers will benefit from best-in-class practices and a wide range of equipment in more locations.

H&E estimates the acquisition will create $25 to $30 million of synergies annually related to corporate overhead, systems and operational efficiencies, as well as scale benefits for equipment purchases.

The acquisition of Neff

is expected to generate in excess of $800 million of gross tax assets for H&E arising from a step-up in the basis of certain of Neff’s assets.

Private investment funds managed by Wayzata Investment Partners LLC holding approximately 62.7% of the outstanding common shares of Neff have executed a written consent to approve the transaction, thereby providing the required stockholder approval for the transaction.

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Income Option Trade for a 12% Return

In our Monthly Income Report, we look for opportunities to utilize option selling to generate consistent income. While we focus on selling cash-secured puts and covered calls on high quality stocks, we sometimes identify high return trades for increased income. These are stocks with positive confirmation and continuing chart trend based on technical analysis. This month we have identified a stock with a bullish technical indicator that has potential to generate a 12% return in only 40 days.

The option trade for monthly income:

Stock: CF Industries Holdings, Inc. (CF) manufactures and distributes nitrogen fertilizer, and other nitrogen products. The Company’s nitrogen fertilizer products are ammonia, granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN). Its other nitrogen products include diesel exhaust fluid (DEF), urea liquor, nitric acid and aqua ammonia, which are sold primarily to the Company’s industrial customers, and compound fertilizer products (nitrogen, phosphorus and potassium or NPKs). The Company’s segments include ammonia, granular urea, UAN, AN and other.

The stock has pulled back from its February levels due to industry pricing pressures. Revenues are likely to rise 13% in 2017 and 6.9% in 2018, after falling 15% in 2016. We see steady North American fertilizer demand growth in 2017, but some pressure on prices. However, new production is likely to lead to increased volumes for CF in 2017. We think market conditions will start to improve with this earnings release as capacity additions slow and Chinese capacity reductions continue.

This stock has formed a diamond bottom pattern (Bullish), providing a target stock price for the short-term above $30 per share. We think the stock can hit the target price within 6 weeks or less. The price recently displayed stronger RSI and positive PMO movements signaling a new uptrend has been established. The Short-Term KST indicator has triggered a bullish signal by rising above its moving average.

Recent bullish option flow has been detected in CF Industries with 5,006 calls trading, 3x expected, and implied volatility increasing almost 4 points to 41.09%. Aug-17 32.5 calls and Aug-17 30 calls are the most active options, with total volume in those strikes near 2,500 contracts. The Put/Call Ratio is 0.22. Earnings are expected on August 2nd.

Sell PUT Option for Monthly Income

 

 

 

 

 

 

 

Strategy: 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.

Exit Trade: Be prepared to exit the PUT (buy to close) when the stock price moves above $30 to lock in profits. If not, there is a chance the stock may be put to investors. If this happens, then investors can sell covered calls for monthly income until the stock is called away.

This is a higher risk trade than we normally place in the Monthly Income Report. However, this is a nice setup with a high volatility play, positive chart technical confirmation and increased premium from selling options for monthly income.

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How to Generate a 10% Return in 45 Days

In our Monthly Income Report, we look for opportunities to utilize option selling to generate income. While we focus on selling cash-secured puts and covered calls on high quality stocks, we sometimes identify high return trades. We like to have 2 or more stock or company events leading to positive confirmation that the stock will continue its trend. This month we have identified a stock with a bullish technical indicator that has potential to generate a 10% return in only 45 days.

Stock: Alkermes plc (ALKS) is a biopharmaceutical company. The Company is engaged in the researching, developing and commercializing pharmaceutical products that are designed to address medical needs of patients in therapeutic areas. The Company has a portfolio of marketed drug products and a clinical pipeline of products that address central nervous system (CNS) disorders, such as schizophrenia, depression, addiction and multiple sclerosis (MS).

Alkermes just announced positive preliminary top line results from ENLIGHTEN-1, the first of two key phase 3 studies in the ENLIGHTEN clinical development program for ALKS 3831, an investigational, novel, once-daily, oral atypical antipsychotic drug candidate for the treatment of schizophrenia. ENLIGHTEN-1 was a multinational, double-blind, randomized, phase 3 study that evaluated the antipsychotic efficacy, safety and tolerability of ALKS 3831 compared to placebo over four weeks in 403 patients experiencing an acute exacerbation of schizophrenia. The study also included a comparator arm of olanzapine, an established atypical antipsychotic agent with proven efficacy.

ALKS will announce earnings on July 27 but should be positive on this news.

This stock has formed a pattern called Flag (Bullish), providing a target price for the short-term in the range of 61.50 to 62.30 (see chart below). We think the stock can hit the target price within 6 weeks or less. The price recently crossed above its moving average signaling a new uptrend has been established. While we like the upside potential in ALKS, we want to protect the downside against market changes.

Technical Setup on Alkermes ALKS

Strategy: We want to sell a covered call on Alkermes using the August 2017 60 Call. For each 100 shares of ALKS stock you buy, sell one August 60 covered call option for a $54.50 ($58.70 – $4.20) debit or better. That’s potentially a 10.0% assigned return with a 7% downside protection. If you want more downside protection, you can purchase an August 55 PUT for less than $2.00 per option.

This is a higher risk trade than we normally place in the Monthly Income Report. However, this is a nice setup with a positive news announcement, positive technical confirmation and increased premium from selling options for income.

Let more about creating monthly income here.

Covered Calls for Life

There are many different styles of covered call writing.  Some people never do more than write calls on stocks in their portfolio to generate additional income.  Other people buy stocks only for the purpose to write calls then sell them. Covered call strategies include active trading for directional moves, for traders with long-term time horizon and those seeking low-risk or limited risk trades.

For the conservative investor, you can write calls that are deep-in-the-money which limits the amount of risk in the trade.  This is a good strategy for those who are fearful of losing money.  For the lazy investor, they should look to a longer call time horizon that is many months out or even sell a leap call.  For the monthly income investor, they should sell calls at-the-money which expire during the next month.  This serves the purpose of creating a monthly income that is updated at the monthly expiration date.

The conclusion is that you can utilize the covered write strategy that best suites your income needs and personal investing style.  Or you can use more than one strategy to mitigate your risk level in income investing.  I sell calls when the market is reaching over priced levels for downside protection.

Join our community to generate monthly income using options strategies like covered calls.  We now have new spots open for new members.

Why Don’t More People Write Covered Calls

It is hard to understand why more income investors don’t use the covered call strategy more often.  Once you sell the call you have an automatic income amount set for you.  Perhaps the biggest reason more people don’t write calls is they are not aware of the strategy.  Unless you stagger upon the strategy or research it online, it is difficult to understand.

Most financial institutions do not mention covered calls as a strategy to their clients as they may risk losing business if clients pursue this strategy on their own.  These advisers are being paid commission on the amount of funds they manage so they have a conflict of interest with their clients.  Simply, they make money on the products you buy from them.

There is a certain amount of fear involving the trading of options.  Some resources lump together all option strategies as being too risky for an individual investor to use in their own portfolios.  Yet, these same “experts” will suggest you buy a small cap growth stock trading at a 100 price to earning ratio.

By producing cash flow from an asset DOES NOT increase the risk of owning the asset.  think about this: all investors should seek a return on their money which is cash flow.  Of course, if you are in the nail business you always recommend hammers!  You must realize that your interests are different from the financial institutions.  And you are the only one to focus 100 percent on your needs.  However, financial advisers make money when you do and when you don’t!  Your biggest decision is to rely on their advice or handle your own investing.

This blog believes in the individual investor and his ability to generate monthly income from writing covered calls, selling puts for premium and owning monthly dividend paying stocks.

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Passive Income Investing

Passive income is defined as “income generated with minimal work through your investments such as interest, dividends, or option premiums but also includes any income system that generates income for you!”
In order to increase your quality of life, the only realistic strategy is to increase your income, and reduce the amount of hours you work to earn income.  How do you do this you might ask? By using time tested wealth creation strategies and investment techniques to create, increase and maintain your passive income.

Passive Income Investing

The easiest way to make passive income is to earn interest or dividends on bank accounts, stocks and electronic-traded funds (ETFs).  This is one of the safest strategies when you own the right securities.  Many ETFs pay monthly dividends that can be combined to create a significant number of passive income sources or checks each month.  More on this later.

One of the best ways to leverage your investment capital is to use stock options. There are literally thousands of ways to use options, both as a trading tool and as a way to protect or hedge your investments.  But options can also be used to create passive income through becoming an option ‘writer’ instead of a ‘taker’.  Here, you get paid a premium when you sell the rights to an option.  This premium is your passive income source.

The optimal strategy is to combine investments that make you rich with investments that keep you rich.  I refer to the former as your “get rich” account and the later as your “stay rich” account.  Basically, you make passive income from your get rich investing and store it in your stay rich investments.  It really is that simple.
Get Rich Passive Incomes
The following is a list of passive income generators you will recieve in each Passive Income Investment Report.  These investments are what you will use to get rich by investing in these instruments each month.  You will recieve a number of trades for each category but you decide which types of passive incomes you are comfortable investing in your account.
  1. Covered calls on stocks you purchase.  We have a proven system of identifying conservative covered call investments that can generate 3-5% return each month.  You can select from our list or invest in all recommendations.  Our system focuses on selecting stocks with the right volitility so you don’t get burned by high-risk investments.
  2. Cash-secured PUT trades to enter a position.  When you find a stock you want to purchase, then sell put options on the stock to lower the purchase price and to collect option premium for cash.  Do this monthly for income until the stock is put to you,  Then, sell covered call options on the stock.
  3. Dividend investing for cash.  This is a simple investment in world-class dividend stocks and CEFs that pay monthly distribution.  This also provides a way to diversify your types of income by using various CEFs investments such as alternatives such as REITs, bonds and many other funds.
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