Generate Instant Income TODAY With This Strategy
It’s no secret. The market has been unstable this year.
The speed and velocity of a bear market selloff, and the swiftness of the ensuing recovery can be hard for investors to grasp, and even harder to navigate.
However, using certain methods, and tricks of the trade I’ve learned over my decades-long career, we’ve been making the most of it.
Today, I have the perfect strategy for these market conditions.
It’s a bullish to neutral strategy that can generate instant income.
Better yet, you can use it on stocks you already own.
It’s an options strategy that might, at first blush, sound complex and scary. But it’s really not that hard. You’ll see when I explain what I’m talking about.
But first, let me paint the picture for you…
Take a look at the daily price action in the S&P 500, the primary benchmark for US Equities.
At the start of the New Year, the S&P 500 hit an all-time high of 4,796.
(Click any image to enlarge)
In the four months that followed, the S&P 500 dropped 28%, bottoming out in mid June at 3,674. Then it started to rally.
Since it bottomed out, we’ve seen bullish momentum carry a strong rally off those lows. In fact, we just closed out the strongest month (July) since November 2020.
We are approaching a level where there’s going to be an overhead of supply. If you own a basket of stocks, now is a great time to pull some cash from your positions.
Although it looks like there are bulls in the market, we know the stock market remains in a bear market, so we have to suspect that this is likely another bear market rally.
The S&P 500 is running into a zone where it will likely meet formidle resistance.
You can use this landscape to generate cash on stocks that you own that is immediately deposited into your account.
If structured properly, it offers a limited hedge, meaning that the premiums you take in offer a small buffer, by reducing your cost basis.
And yet, if structured the right way, it also allows for additional upside capital appreciation should stocks continue to advance.
It’s called a Covered Call strategy. With it, you sell Call options against a long stock position you already own.
This kind of market environment is perfect for this strategy: Market breadth is positive, stocks are rising, and short-term conditions are overbought.
In this strategy, we are the seller of options.
The money is yours, and you can use it as you please.
Since the cash is available instantly, you can pull it out of your broker account or use the debit card to make purchases (if your broker account is set up that way).
How To Get Paid TODAY
Let me show you how it works with a timely example, using Amazon.com (AMZN).
Here we find the stock recently trading around $135 per share.
So we can sell the September 145 strike call option and collect $3.00 ($300 per contract) for every 100 shares of AMZN stock that we own.
You still have room for $10 of upside capital appreciation.
By selling the $3.00 premium, you generate a 2.2% return. Annualized, it equates to a +18% return.
That’s more than twice the rate of inflation running at a forty year high!
This is just one strategy to make your money work harder for you.
Got options? You should!