You Really Can Earn
10-20% Monthly
But you MUST read this eBook before you start!
Dear Friend,
You may remember the former stock market guru, Wade Cook. He became famous by promoting various financial strategies. Among them was the covered call. d call. Here's the formula:
Buy 1,000 shares of a stock on margin at $9.50. So we pay $4,750.00 up-front. Sell the next month's call at a strike price of $10.00 for $0.75, which gives you $750.00 cash in your account the very next day. Then kick back and wait fod wait fo r the stock to close above $10.00 on expiration day. You'll get called out. (If this is jibberish to you, our eBook explains it in great detail.)
Here's what your profit looks like: You took in a premium of $750.00. You also have a capital gain, right? You bought the stock for $9.50 and sold it for $10.00, which gives you a $500.00 capital gain on your 1,000 shares. Our total profit is $1,250.00 on an investmentnvestment of $4,750.00. That gives us a one-month return of 26%! Hey, when are we heading for the Bahamas?
2 The Problem
That just sounds peachy, doesn't it? The problem is, though, that it's rarely reality. Our stock could bounce around between now and expiration. Or, worse yet, it could tank! Then you have mar have mar gin calls and could even be wiped out. This was the side Mr. Cook and his cronies spent as little time on as possible.
That, unfortunately, is what happened to me before I got good at investing and trading. Here are the detailhe detail s of a very bad trade: I bought 300 shares of Liposome (LIPO) on September 3, 1999. (This stock is no longer around. I wonder why!) I paid 21 3/8 per share, and bought the shares on margin. My total cash outlay was as follows:
300 shares x $21 3/8 per share = $6,412.50. Divide the $6,412.50 by 2, because I bought LIPO on margin. That number is $3,206.25. Add my $14.95 commission = $3,221.20 total cash outlay.
On the same day, I sold 3 contracts of the September 22 1/2 call (note: that was the closest out-of-the-money strike pr strike pr ice). I sold the 3 contracts at 1 15/16 per contract. My total cash inflow was:
What was my net yield? $554.23/$3221.20 = 17%!
Let’s take out 1% since I had to pay margin interest. Okay, so I earned only 16%. Big deal. There were only two weeks until expiration, so I thought I had a real winner here.
Then the bottom fell out: LIPO reported earnings after gs after the closing bell in mid-September, and those earnings were horrible. LIPO opened the next morning at about $9.00 per share. Yes, this was the same stock for which I had paid $21 3/8 only two weeks earlier. Boy, did I feel like a schmuck.
After the September options expired, I quietly sold my 300 shares of LIPO at $7 11/32. Yes, I got to keep the $554.23 I received for selling the September $22.50 calls. But, believe me, it wasn’t much of a consolation prize.
If you think this won’t happen to you, I have a certain u, I have a certain bridge to sell you, because it WILL happen to you at some time. It brings up the most important question any investor or trader could ask:
2 Are You Facing Devastating Gaps In Your Trading Strategy?
You see, if you buy a stock like LIPO, most bad news is likely to happen after hours, when you can't do anything about it. A stop loss will do you no good in that situation, since a stop loss order is really just a market order in disguise. If your stock gaps through the stop, the stop becomes a market order, and you could be filled with an enormous loss. And your loss is doubled if you do it on margin. One loss could wipe you out, even if you've had a series of winners. That's why it's called a devastating gap: if your stock gaps, you have a problem. And you face the potential of devastating gaps whenever you buy or short a stock. You face the same problem if you write covered calls, because you're only covered against minor losses.
Day traders also face the possibility of devastating gaps, since bad news can break during trading hours. That news is likely to break when you're eating lunch or attending to Mother Nature's call.
2 Here's What You Can Do About It
After my bad experience with LIPO, it was time to put in a labor of love, and that's what I did. What are the best stocks to buy for this strategy? And, more importantly, is there a way to protect ourotect ou r investment in case the bottom falls out? Absolutely! The answers are revealed in this astonishing eBook, "Using Covered Calls, Covered Puts, and Options."
This book takes you fro takes you fro m A to Z in this area where it's tough to get good information. Even if you've never bought a stock, if you've never dealt with options and don't have a clue what I'm discussing, don't worry. It's all explained. If you're a real pro, skip the introductory chapters and go right for the meat and potatoes. (That's "Potatos" for Dan Quayle.) Here's what you get:
- What Is An Option?
- What Kind Of Stock Should We Look For?
- Write Only The Right Covered Calls
- Should We Buy The Stock On Margin?
- What Option Should We Sell?
- How Do We Protect Our Account From devastating gaps, especially Overnight Disasters?
- How Can We Do This Strategy If We're Short Stocks?
- How Can We Actively Trade The Position After We've Established It?
2 Works In Any Market
We fill the book with multiple examples. We explore all the possibilities of what can happen after we've taken a position, and what we can do about it. You can use the strategies from this eBook in ANY market, because one variation works well in bear markets. That way, there are no surprises! You take a position and sit back, waiting for the stock he stock to do what it wants. No matter what happens, you're ready. If it goes your way, fine. If it doesn't, you'll be able to take corrective action and avoid disasters.
The author is uniquely qualified to write about this subject. He has been investing in both stocks and options for 20 years! He was a Certified Financial Planner for 10 years and knows how Wall Street crooks work. He's had days of $40,000 profits as well as hard-knocks learning experiences like Liposome. He can tell you, the $40,000 profit days are much better! And he's willing to give you his secrets for about t secrets for about t he cost of one stock transaction. Is it worth it? Or would you prefer to spend thousands of dollars in the school of hard knocks like he did and have nothing to show for it?
View A Sample Of Our Subscription Page At No Cost
This trade sample is old, so don't trade off of it! But look at what it does. We start out by giving the closing index prices, as well as prices of stocks on our trade list. (We change the list periodically.) On the upper right-hand side, you'll see investment and gold recommendations. (All the XXX's go away when you y when you subscribe.) As we said, you'll get a week for free when you order the eBook. We'll assign you a username and password for entry. After a week, that will be deleted. You don't even need a credit card to get your free week!
In the next section of the sample pagemple page , you'll see our trades. We took our active option trades and broke them into three levels of option categories, so that people at each level can see what we do and get an education on how different levels of options traders would handle the same trades. Note, for instance, LEH, which is Lehman Brothers. We first show you how a Level 3 trader handes the trade. Then we show how Level 2 traders would do the same thing, followed by how a Level 1 trader would handle it.
The far right-hand corner is for stock traders. Maybe you're a trader who doesn't want to get involved with options. If so, the right-hand side is for you.
Now go down to the yellow section, where we have our watch lists. One list consists of good prospects for option traders, while the other list is for pure stock traders. On this day, we didn't see any good prospectsfor option traders. But we did list a potentially good stock trade. That's what we do: there are days when we have tons of prospects, while there are few or no prospects on other days. We don't push it.
Below the lists you'll see that day's market commentary, followed by a real estate article.
Where else do you find information like this?
You can't. Pure and simple. You can't. Pure and simple. Get the subscription page and eBook now!
You'll get the eBook in pdf format. You'll have it very shortly. The eBook is yours to keep, and you'll get a week free at our members-only site.
So Let's Summarize:
Get the eBook, "Using Covered Calls, Covered Puts and Collars" for $9.95. Click here! After ordering, email us that you've ordered, and we'll send you a username and password for use at our site, good for a week. After the week is up, you'll be deleted automatically, but the eBook is yours to keep.
Happy Trading
John Finger
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