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Archive for the ‘Selling Puts’ Category

Selling PUTs for High Return Monthly Income

I have created an investment that achieves higher monthly returns while managing stock risks in the trade. You may be skeptical of this concept and should be when you hear something like this introduced into your trading plan. To explain, let’s look at what must happen to a stock price for a successful PUT selling trade. To keep the premium from the PUT sell, the stock price must be above the PUT option strike price at expiration. To increase my percent of winning PUT trades, I invest in stocks with price momentum moving higher. This increases the probability of the stock price closing above the strike price – giving us more winning trades.

How do I identify these winning trades? I combine the fundamentals of a stock with its price performance on its stock chart. I find securities that have a positive change in price that creates upward price momentum. You may have heard about price breakouts and other upward biased chart patterns. This introduces a concept of technical analysis into our trading plan.

Technical analysis uses stock price movements and trading activity as the basis for drawing a conclusion about where the price may be headed. It is based on the premise that prices move in trends that tend to continue until something changes to affect the balance of supply and demand for the stock. These changes can be detected by analyzing prior changes, looking for recurring patterns that indicate a price trend, or indicate areas of support and resistance that may influence the price direction.

SEE THE RESULTS FROM THIS MONTH…

The market was in a blast mode as it ran to record highs again. We had all winners this month with max income trades. And how about the monthly returns on the PUT trades – 4.8% on ARRY; 8.8% on TLRD; 9.6% on NL; and 8.7% on MDXG!!! This is a yearly return on some buy and hold stock investments in a monthly trade for us. We will look for more stock breakouts for PUT trades in our next newsletter.

Sell Put on Array Biopharma (ARRY)

STRATEGY: Look at the December 2017 11 cash-secured put trade. For each 100 shares of ARRY stock you want to control, sell one DEC 2017 11 put option for a $0.50 debit per option or better. That’s potentially a 4.8% return on the cash-secured put trade.

Actions: ARRY is currently trading at $10.82 so the 11 PUT we sold is ITM. Buy to close the PUT before expiration if the stock price is below the strike price of 12. If stock above 12, PUT will expire.

Sell Put on Tailored Brands (TLRD)

STRATEGY: Look at the December 2017 16. cash-secured put trade. For each 100 shares of TLRD stock you want to control, sell one Dec 2017 16 put option for a $1.30 debit per option or better. That’s potentially a 8.8% return on the cash-secured put trade.

Actions: TLRD is currently trading at $19.46 so the 16 PUT we sold is OTM. Let the options expire on 12/15.

Sell PUT on NL Industries (NL)

STRATEGY: Look at the December 2017 12.5 PUT trade. For each 100 shares of NL stock you want to control, sell one Dec 2017 12.5 PUT option for a $1.10 debit per option or better. That’s potentially a 9.6% return on the PUT trade.

Actions: NL is currently trading at $13.30 so the 12.5 PUT we sold is OTM. Let the options expire on 12/15.

Sell Put on Mimedx Group (MDXG)

STRATEGY: Look at the December 2017 10 cash-secured put trade. For each 100 shares of MDXG stock you want to control, sell one Dec 2017 10 put option for a $0.80 debit per option or better. That’s potentially a 8.7% return on the cash-secured put trade.

 

Actions: MDXG is currently trading at $12.25 so the 10 PUT we sold is OTM. Let the options expire on 12/15.

A 600% Trade in 2 Days for Fast Cash!

On Dec 5,subscribers sold PUTs on US Steel (X) for $1.24 per option.  Our stock chart indicator identified an Ascending Continuation Triangle in the stock.  This is an indication the stock had positive momentum and was ready to break out.  Our strategy is to sell PUTs on the breakout and buy to close the PUTs to lock in profits.  This allows subscribers to close out of trades early (locking in profits) to compound your dollars into more trades.  The more compound trades increase the total monthly income.

So how did the trade work out for investors?

On Dec 7 (yes only two days later), subscribers bought to close the PUTs on X for $0.30 per option.  X was trading at $29.84 at the trade entry but jumped to $33.00 per share in the following days!  We closed the position to lock in fast cash following the stock breakout trade.

This resulted in a gain of $94 per option sold in only 2 days.  If you had sold 10 PUTs, you would have made $940 in 2 days on one trade.  This is a 3.3% cash return in 2 days or 600% annualized trade.

Join the newsletter for only $29.99 is the best deal for making monthly income.  Let’s see, spend less than $30 to make $940 on one trade and a few $thousand each month in extra income!  Join the Monthly Income Newsletter to create your income monster.

 

Here is the details of the US Steel (X) Trade shared with subscribers on Dec 5:

Stock: United States Steel Corporation (X) produces and sells flat-rolled and tubular steel products primarily in North America and Europe. It operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular). The Flat-Rolled segment offers slabs, rounds, strip mill plates, sheets, and tin mill products.

Chart: We have detected an “Ascending Continuation Triangle” chart pattern formed on United States Steel Corp (X on NYSE). This bullish signal indicates that the price may rise from the close of 29.84 to the range of 33.20 – 34.00. The pattern formed over 29 days which is roughly the period of time in which the target price range may be achieved.

United States Steel Corp has a current support price of 27.10 and a resistance level of 30.21.

Strategy: We have an opportunity to sell options for income with X 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 a December 2017 30 PUT for about $1.00. This creates a return of 3.4% to expiration in 10 days or greater than 124% annualized.

For a conservative trade, you can setup a covered call trade. You can purchase 100 shares of X and sell a December 30 CALL option for about $0.90 for an assigned return of 3.4% in 10 days for a 124% annualized return.

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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You Can Help End Poverty

How to Make 6% per month using Income Trades

At Get Rich Investments, we focus on creating monthly income. One strategy is to sell puts on select stocks we identify being in a break out stock price position. The concept is simple, stocks with momentum will move higher in the short-term time period. To make monthly income, we sell puts on these stocks to capitalize on the price movement. If it moves higher, the value of the puts will decline. Investors can then buy to close the puts to lock in gains.

Then, back to selling puts for more monthly income if the stock is still a great selection. This can be a great strategy for monthly income as momentum stocks we trade have recently had a price breakout from a previous trading range. It’s alright for a stock to move up within a nice trading range. This makes the amount of premium collected higher based on some volatility. But we do not want to risk our trading capital by taking big losses so we exit the position to take profits in many cases.

For example, we had two put trades that each produced 6% in the past month. Here are the details:

On September 29 we entered a PUT trade on Gaslog (GLOG) that expired with a 6% gain. For subscribers, we sold puts on Grubhub (GRUB) that expired with a 6% return in our November Monthly Income Plan.

GLOG: 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.

GRUB: Subscribers: Look at the November 2017 52.5 PUT trade. For each 100 shares of GRUB stock you want to control, sell one Oct 2017 52.5 PUT option for a $3.00 debit per option or better. That’s potentially a 6.0% return on the PUT trade.

Why would an investor sell put options instead of just buying the stock? You already know my response to this question – to create monthly income. These trade examples are proof that we can earn high returns on income trades.

We monitor the market looking for stocks poised for break outs to sell puts for income. We provide several trades in the monthly income newsletter and several additional trades as opportunities arise.

Get access to put trades for monthly income by subscribing to our newsletter here:

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PAY IT FORWARD – Help stop hunger and shelter those in need

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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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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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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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.

True Wealth is Your Income

As investors, we often look to the market to identify investments such as for stocks to increase in price over time. This centers around the thought of owning companies that increase in value over time will increase wealth. This is true – if it happens in time. But can you retire on the hope of a stock increasing in price? My argument is simply based on the theory of true wealth is the income you generate from your investments. You shouldn’t measure your wealth by the amount of assets, but by the income it generates.

To generate a great retirement, you will need an income stream to maintain the lifestyle you choose to live. It is income that pays the bills and gives you money for the vacation and travels you wish to have in your life. Simply, income is what you live on.

This can be achieved many ways such as owning dividend paying stocks, bonds and other investments such as rental properties. According to studies, dividends have accounted for about 43% of the performance of stocks in the S&P 500 since 1926. But don’t be blinded by focusing on the Wall Street pitch of this stock is the one!

At Get Rich Investment, we view income as the means to financial independence. We focus on generating multiple streams of income from various sources to diversify risk. We start with world class dividend stocks that raise their dividends to produce a growing income stream. Then, we may sell covered calls against these stocks to collect monthly premium income. Another strategy is to sell cash-secured puts to generate income on those stocks we have an interest in purchasing. We also create income from investing in closed-end funds (CEFs) that pay monthly distribution (and also diversifies type of investment classes).

You can guess what happens when your investment income meets or exceeds the amount for your lifestyle. Live the life you want. Get started generating more income today!

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