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In my post Using Stock Options To Generate Monthly Income, I introduced you to the use of the Options instrument when investing in the stock market. Even guru like Warren Buffett leverages a lot on this instrument.
It has been 1.5 year, and I am glad the options strategies I learned coupled with value investing principles have helped me consistently generate an additional source of monthly income.
Journeywithmoney has teamed up with the good guys at Options Mastery Programme and we are organizing a workshop next Tuesday (27th Feb 2018) to share with you more. Just click on the photo below to get more information and to register.
But first I want to share with you just how safe one of the strategies taught is. And I am going to keep this simple as some of you may not know Options language.
The US stock market plunged 10% from the recent peak just about 2 weeks ago and we had the first market correction in 2018.
On 22 Jan, I sold 5 put option contracts (Strike Price $15, expiring 16 Feb 2018) on EGOV (a company which provides eGovernment services, growing EPS over the last 10 years and good fundamentals). The premiums I collected was $250 which gives me a return of $250/$7,500 = 3.33% for the month if the option expires worthless.
Well, price across the board dropped and by 16 Feb 2018, the price of EGOV was $14. I would have lost $500 if I bought the stock off the market.
What I did was to close my position (bought back the option) and sold another March Put and my P&L becomes:
$250 (initial premium) – $575 (to close position) + $750 (put sold again) = $425
There are other details to explain, but in short, you can see over the two months, I am still positive $425 (or average of 2.83% per month). Of course EGOV price has to be above $15 by March options expiry date.
This single strategy called L.R.O.S. by Options Mastery Programme allows me to generate another source of monthly income. Other strategies let me buy undervalued stocks at a fraction of their stock price.
Options Mastery Programme (OMP)
So far OMP has over 300 graduate students across multiple countries. They have varying degrees of success purely because some are taking actions faster than others. You can read more testimonials.
I do invite you to join us for a FREE workshop where we can share more information. The workshop itself provides valuable information which we believe will make you a better investor.
Click below to register NOW.