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Collecting a 49% Cash Dividend over a Six Month Period

Selling option premium allows you to collect cash dividends that are credited to your brokerage account from the sale of call options.

For example my brokerage confirmation below shows that I sold 2 Apple Jan 230-Strike call options at 58.08 points. This resulted in $11,610.27 in cash being credited to my brokerage account after commissions. I get to keep this cash dividend regardless of the movement of Apple stock.

Chart I

Rolling over your cash dividend trades as options expire allows you to collect a substantial amount of cash that provides protection if the underlying stock declines in price.

In this video you will see an example of one of my trading accounts that started with a $311,800 balance. Over a six month period I rolled over my cash dividend trades and collected a total of $152,900 in cash dividends which resulted in a total cash dividend of 49% of my account starting balance.

Collecting a 49% cash dividend provides substantial protection if the underlying stock declines in price and can result in a high percentage of winning trades even if your market timing is not very accurate.

In this video you will also see an example of a bearish cash dividend trade that profits as the underlying market declines in price.

Futures trading involves high risks with the potential for substantial losses. Hypothetical performance results have many inherent limitations, some of which are described as follows. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. there are numerous other factors related to the markets related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. Option and stock investing involves risk and is not suitable for all investors. Only invest money you can afford to lose in stocks and options. Past performance does not guarantee future results. The Chuck Hughes Inner Circle Advisory trade record does not represent actual investment results. Trade examples are simulated and have certain limitations. Simulated results do not represent actual trading. Since the trades have not been executed, the results may have under or over compensated for the impact, if any, of certain market factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.