Old money, made new

Trades for PostMy style of teaching has been to get people excited with knowledge. I will use that process. Let me share a simple example of writing a covered call. Write means to sell. Covered means you own the stock. A call is a call stock option. Most people buy calls. Most people lose. Stick with this and you’ll see that we sell the option and make money now. Here’s a real example from today. A stock, ticker symbol XOMA was $3.85. If you were to buy 1,000 shares it would cost $3,850 or half of that, about $1,900 on margin. It’s a form of leverage. Now, the December call options are 40¢ to sell. You can sell 1,000 of these, and take in $400. What does this mean? We are selling into the market the right for someone to buy our stock any time before the 3rd Friday of Dec. They have the right to buy our stock at $4. We have the obligation to sell the stock if they want to buy it. And we got paid $400 for taking on this obligation. It’s kind of like rental real estate—well, we’ll call it rental stock. We take in $400 now. That’s cash you can use now. You get to keep the $400 whether they buy the stock or not. You got paid cash for taking on the obligation to sell your stock at a set price, and if they do buy the stock you make another $150 (that’s the $3.85 up to $4, or 150) for 5 plus weeks. What do you think of that? Another question is this: assuming you see the profits, is it worth your time to learn more and get assets producing income so you can quit your job and maybe retire better. We have provided effective ways to get you up to speed. Order the Special Money Report: JOB FREE INCOME, and start learning this simple, yet powerful strategy. Go to www.wadecook.org and put JOB FREE INCOME to work for you now.

Stock MarketWade Cook