There's still a remarkable income trade available to
Income and Prosperity
Six months ago, Ian Wyatt and I started a service called
High Yield Trader
and made our first investment for the portfolio…buying
The idea was to buy shares of the blue-chip,
shareholder-friendly tech behemoth... and then sell someone the
right to buy those shares from us at a higher price. The practice
is better known as " covered calls."
Our original goal was to basically double the 3.4% dividend,
and earn a save 7% yield.
The results have been remarkable. After just five months,
well, we've more than doubled the dividend. In fact, we've nearly
tripled the dividend and now estimate that we'll make an
additional 8% in income over the next seven months.
And if you're willing to learn the basics of this strategy,
you can still use Microsoft to safely collect 6-8% per year.
Let me show you how it works...
In our original trade back in late April 2013, we noted how
you could buy shares of Microsoft
for around $31.50 and simultaneously sell the June $33 calls for
In other words, we were buying shares for $31.50, then selling
someone the right to buy them from us for $33 per
We earned a "premium" - also known as income - of $0.40. And
that provided us with an immediate 1.3% yield on the original
stock position. And the options had a lifespan of less than two
So the 1.3% return was an "annualized" gain of about 8%.
But by the time our June $33 calls were to expire, Microsoft
was trading for over $33. So we were forced to sell our shares
for $33. As a result, we pocketed a capital gain of 4.7%, plus
our 1.3% in call premium for a total return of 6.0% in just two
To drive the point home, let me cover the trade in "real
We bought 100 shares of Microsoft for $3,150. We collected $40
in super-low-risk premium for selling covered calls on
Microsoft. And once those calls expired or called away, we do it
all over again.
An 8% annual income stream on the $3,150 stake is $252. That's
an extraordinary amount of extra income coming from a great blue
chip stock like Microsoft. And remember that's only based on the
bare minimum of 100 shares.
Now... you might be thinking, "You're not telling us the full
story. You can't repeat that trade all the time."
But... two months later... in late June, I essentially made
the same trade with the same stock. We were able to bring in
another 1.5%. Not only that, but we did it once again in August
for a 1.3% gain.
So far we've managed to produce a total income of 8.8%
over the past five months.
Keep in mind, Microsoft shares didn't have to "soar"
for us to earn this extra income. We made money as the stock
climbed, moved sideways, or even declined a little.
Microsoft has spent the last five months moving sideways...Yet
you could have used the stock to build a covered call position
that would have produced almost a 9% yield.
The best news is that you can do this again right now. Today,
you can buy Microsoft for around $32.74 per share. I recommend
selling the 34 calls for $0.62. That produces an instant "yield"
The calls expire in November, just two months from now. If the
stock stays where it is or moves lower, you keep your shares...
and you can sell another round of calls. Making this trade six
times in a year will produce a 12% return.
If the stock has moved higher by then, you'll sell your shares
at $34. That will give you a 3.8% return. And you can do it all
over again. Making this trade six times in a year will produce a
Add in the annual 3.4% dividend Microsoft pays, and you're
collecting between 12% and 23% a year on one of the most dominant
stocks in the market.
All you have to do is learn the basics of this approach and
put them to work for you.
If you are interested in learning all the
details, please click here now.
As you can from the chart below there's a reason why
High Yield Trader
is our fastest growing service at Wyatt Investment Research.