The vast majority of people only know how to buy shares and sell them when the price rises above the purchase price. However, the price in the market has 3 directions.
1. Climbs
2. Floats sideways
3. Drops
It means you only make money 33% of the time. You spend the other 66% waiting while the price goes nowhere or drops. Therefore, you must learn how to make money when one of the other options other than a price increase happens.
The market, in general, has been falling in recent months. So most people have seen their accounts plummet. But today, I’m going to show you how you can make money regardless of the price direction of your investments.
Using the strategy of catching dividends, I invested in Intel Corporation (INTC).
Intel company had an ex-dividend date of May 5, 22. Two days prior, I invested $4,540. I made a purchase of 100 shares for $45.40.
Once the purchase went through, I quickly sold an option expiring May 6, 22, for a credit of $38.
Since then, Intel’s price has dropped and remained below $45. Typically, people are left waiting for the price to recover, looking at their accounts stagnant for weeks or months.
On May 6, 22, as Intel’s price did not reach $46 or more, the option lost most of its value. So I did what is called a ‘roll.’
I bought that option for $3 and sold the option expiring May 13, 22, for a credit of $54, giving me a net income of $51.
Similarly, the price of Intel did not recover and remained below $45. Repeating the process, on May 13, 22, the option lost all its value again. I bought the option for $1 and sold the one expiring May 20, 22, for $26. For another $25 net credit.
On May 20, 22, the price still did not rise to $45 or more. Unfortunately, I couldn’t watch the market that day, so the option expired and died, losing its value.
Starting the week of May 23, 22, I sold a new option expiring May 27, 22, for a $5 credit. Likewise, the price of Intel did not recover, so on May 27, 22, I bought the option for $1 and sold a new one expiring on June 3, 22, for $26, for another net credit of $25.
Since I held the shares on the ex-dividend date of May 5, 22, I received a cash payment of $36.50 via dividend on June 1, 22.
Arrived on June 3, 22, the price closed at $43.39, for which the option expired worthless. But, once again, I couldn’t watch the market on this day, so I didn’t do another roll-over.
For 1 whole month, the price of Intel has remained below the purchase price. However, I have generated a total of $184.50 in cash. Subtracting the $5 I have spent on option purchases, I have a net profit of $179.50 or a 4% for the month.
I still hold the 100 stocks on which I will continue to sell options at or above the purchase price.
As you can see, a person with no knowledge of the market would be holding their shares and would have a loss on paper of $201 and nothing more. That person is possibly frustrated with the market because it hasn’t gone up. But we learn to make money in the market no matter how it goes; we make cash while we wait for the recovery.
I want to teach you these strategies and others for free. So I am working on a YouTube channel in which I will teach you everything I know through videos. The channel will be Investi for Spanish-speaking individuals and InvestCity for English-speaking people. We estimate its opening for the end of summer for Investi and early next year for InvestCity.
Stay tuned, and we will provide you with more information soon.
Now, begin your Road to Wealth!
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