A Real Covered Call
A Real Covered Call. I’m going to date this information. April 20th 2015 I really think it’s important for many people—especially those who need extra income, but don’t want to or can’t work much harder—to learn how to get assets producing income. The stock market may provide just such an opportunity.
It’s a process called Writing Covered Calls. It’s sort of like rental houses but using stocks to make extra monthly income. And it’s a lot easier to do this strategy than being a landlord.
An example (one that is real and we just did in a tracking account), would help explain this. The stock ticker symbol is FUEL. I’ve studied this company for months. The stock price is $9.06. For this example we’ll buy 1,000. Normally that would cost $9,060, but anyone can use margin (meaning the broker will put up half of the money), and so you would have to put up $4,503. You don’t have to buy 1,000 shares—200 or 400 also works.
Now, you sell an option (not buy) for May for $800. They were 80¢ at the $9 strike price. In short someone just gave you $800 for them to buy the right to buy your stock at $9. Just think of this. Someone (the market) likes this stock and is buying the option. Their motivation is different than yours. They’re taking a risk. You’re taking their cash. Again, it is $800 and it’s in your account tomorrow—waiting for you to use it, pull it out and pay some bills, etc. It’s your cash.
The month comes and goes. They will either buy your stock or not. Either way you get to keep this $800. Do you see why we call it rental stock? This can be done monthly. Oh, and you can start with $800 or so.
Wealth Information Network is the site of real deals. Today, I just hope you will ask yourself this: Is Writing Covered Calls worth exploring? If you answer yes, and if you need more information—including how our educational service works (TDT)—please get the Special Money Report: JOB FREE INCOME. Click on a nearby link or go to wadecook.org.
Your retirement is too close, your family too important to leave your financial future up to chance. Take control by getting control of your financial destiny.
Your “Cash Flow” Friend, Wade Cook