Wall Street Elite's "Income on Demand" Strategy

The "Income on Demand" Strategy of the Wall Street Elite… and How to Do It By Jack Carter, Founder, Jack Carter Trading A great strategy that I refer to as "the income on-demand strategy of the Wall Street elite." Basically, it's a strategy for making some money on a stock that you think might have some volatility, but you expect it to generally move higher. You get to pick the price that you sell the put for. That's the price that you think the stock will not go above (within the time frame that you choose). What's even better, which you can use to your advantage. You don't have to have a lot of money in order to use this strategy. Immediate Income from Naked Puts The first step in deciding the best strategy to maximize your chance at making a successful trade is to gauge the broader markets. I took this chart of SPY (which is an ETF that closely tracks the S&P 500) directly from my TrendPoint software. I can see from this chart that conditions are favorable for this type of trade: markets are bullish. There is just enough volatility, but we see that the markets are generally moving higher. Now that we can see it's a good condition to make this kind of trade, another bit of good news: You don't need to spend a lot of money to make it happen. The amount of capital that you need for the underlying stock is a lot less than it used to be. In fact, the margin requirements have been lowered dramatically. As a result, the yield on these trades based on what the money you put down becomes much lower. This is why this is a great strategy for income to use to your advantage in the kind of low-yield environment that you're seeing. When you sell naked puts, you make that income immediately. Another benefit you're taking advantage of is time decay. Let's say the put were to expire worthless. If you're selling the put for $12 - that's $12 times 100 shares for every contract that you own - $1200 hits your account instantly when you sell the put. We find that to be the sweet spot when the expiration date is about 40 days out. But some people prefer different time frames, and that can work too. It all depends on the cycles of the markets. Complete Control with Naked Puts Again, selling naked puts is a great strategy for generating income in the kind of yield-starved environment that we are seeing right now. Especially with a bullish market with some volatility that we generally expect to move higher. I like selling naked puts because you get to control all the underlying components of the trade: The underlying stock: which company is showing the trends that point to making this kind of trade? The time frame to expiration: usually I stick to options with an expiration date that's 40 days out, but it depends on what you're comfortable with. The strike price: This will influence value of the premium and depends on where you see the stock's price going in the timeframe you're considering. With that much control over the trade, it makes it a lot easier to make the most of the profit cycles that we're seeing. Consider selling naked puts as a great way to create some income in an environment like this. Talk soon, Jack IMPORTANT: Click Here for our Full Risk Disclaimer

Sent to: edwardlorilla1986.paxforex@blogger.com

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