How To Earn A 15.8% Yield... From Target
In case you missed it, I recently hosted an online masterclass for investors who want to make simple, effective high payout trades that will help you generate more income than you ever thought possible.
For those who missed it, there's still time to check it out. But for now, I want spend some time discussing just how effective this strategy can be. And in just a second, I'll prove it to you...
For now, just know that my strategy involves options. Forget what you may think you know... the way I trade options is one of the most conservative income strategies around. I've made successful trades more than 90% of the time since 2013 using this technique.
|Why The Media Is Hiding This Breakthrough Marijuana Discoveryâ Scientists just uncovered a ground-breaking technology that will revolutionize the marijuana industry. But the "lame-stream" media has covered it up to give Wall Street insiders first dibs. That’s 100% unfair! A new report reveals the truth and offers step-by-step details on how you can claim your share of the company that’s about to become "The Pfizer of Pot." Click here for details.|
Here's A Peek At My Trading Record In November
In fact, the week after options expire is one of my favorite times of each month. That's because, as usual, it means it's time for my Income Trader followers and I to review our trades.
And while I don't like to brag, we had some outstanding results in November, as usual.
This past month, five put positions expired worthless. For those of you who are unfamiliar with options, that's a good thing for us.
You see, every time I make a trade, I get "Instant Income," or money upfront for selling a put contract. And when the options I sell expire worthless, that income becomes pure profit.
We have now closed 301 put option trades since last March 2013 with just 25 losses. That's a 91.7% win rate over more than six and a half years. You can see the positions we closed in November below:
Every trade we closed this month made a profit. Even my "worst" trade -- Target (NYSE: TGT) -- made a 1.9% return in just a 45-day trading period. That may not sound like a lot at first, but if you were to get a 1.9% return every 45 days for the entire year, that would be the equivalent of a 15.8% annual return.
This month's results are consistent with the performance we've seen in the past. Since 2013, we've consistently generated steady income.
And I don't see anything in the current market environment that threatens this strategy.
Here's the best part: So far, my trades have generated income averaging $57 every 42 days. This is on an average investment of $1,455. That comes out to more than $2,900 in income per year, or a 29% annual return for a $10,000 account.
How We Earned A 15.8% Annualized 'Yield' From Target
The Target trade I closed in November is a perfect example of that...
As you know, Target is the popular retailer with more than 1,800 stores in the United States. The latest better-than-expected earnings report form the company pushed the stock price up. This triggered a "buy" signal from my proprietary indicator back in October (below).
As I told my followers, in the past, the stock has made consolidated moves after earnings. That tendency provides a high-probability, high-income trading opportunity.
After seeing this, I recommended selling a put on TGT with a strike price at $90 -- more than 14% below the market price at the time. That means the stock would need to fall 14% for the option to be exercised -- a huge margin of safety. The stock stayed well above the strike price and ended up closing above $90 when the option expired.
If the puts had been exercised, we would have been obligated to buy a growth stock at the bargain price of just $90 per share (which is a big discount -- shares were trading at $105 when we entered the trade).
But because the option expired worthless, readers who followed this trade earned $45 per contract for a 1.9% return on their investment (remember, you can sell as many contracts as you want -- and scale up the amount of Instant Income you collect).
Not only did we get a 1.9% return, we got it in just 45 days...
How You Can Make Trades Like This
Bottom line: My objective is not to speculate on short-term stock market moves. Rather than looking for stocks that could deliver short-term gains, my recommendations will always be on stocks I expect to deliver the best income opportunities, and these stocks will often offer multiple opportunities to profit.
In other words, each of my trades in Income Trader led investors to a way to either profit from buying a stock at a bargain price, or profit from a put sale if the option expires worthless -- which would let us simply keep the "Instant Income" we get from selling the put in the first place. In investing, it's as close to a win-win strategy as it gets.
You can make trades like this, too. In fact, I'm so sure you can use his program to become an income millionaire, my publisher and I will pay you $1,000 to get you started. Go here to learn more.
- This Income Strategy Lets You Have The Best Of Both Worlds
- The Trade War, "No-Brainer" Stocks, And Investing Mistakes To Avoid
- The "Sweet Spot" For Covered Call Trades
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.