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ETF Option Purchases

If we can identify a market sector moving up in price, we can also profit from purchasing call options on Sector ETFs which allows us to harness the leverage options provide.

The video below will explore a strategy for selecting low risk entry points for an ETF option purchases. A low risk entry point helps prevent being stopped out of a trade and increases the accuracy of our option trading.

We will also explore our 1% Rule for selecting an option strike price with a high probability of success. Actual ETF option trades will be used to demonstrate how low risk entry points and the 1% Rule can help you become a more profitable ETF option trader.

ETF Cash Payout Strategy

This strategy generates weekly cash income from the sale of call options on ETFs. If you collect a 2% weekly payout, you have the potential to collect a 100% cash payout over the course of one year. This can cover the original cost to purchase one hundred shares of the ETF. If you collect a 100% cash payout a lot can go wrong and your trade will still be profitable.

The strategy is easy to implement in a standard brokerage account and you only need a $3,500 trading account to get started. We focus on ETF's that generate a 2 to 3% cash payout each week. This allows us to collect cash payouts over the course of one year, that exceed the original cost basis to purchase 100 shares of the ETF.

The weekly covered call strategy only takes about 20 minutes a week to implement and incurs less risk than a buy and hold strategy. Learn how you can start collecting weekly cash income from this low risk strategy.

Weekly Covered Call Strategy

The weekly covered call strategy is working well in the current volatile market conditions with rich option premiums.

This video will explore trade management techniques for trading weekly covered calls. Chuck uses a trade management technique that will allow us to keep our stock/ETF shares in our account so we can collect a weekly cash payout from selling call option premium.

 A Low Risk ETF Income Strategy

When you generate a 207% cash return on your ETF position, a lot can go wrong and you will still profit:

  • The ETF could decline substantially, and you could still profit
  • If you had bad timing on entering the trade you could still profit
  • There could be volatile price swings in the ETF and you could still profit
  • This gives the strategy a huge advantage over ETF and ETF option directional trades that require the ETF price to move in the right direction to profit
  • And unlike directional trades, the ETF income strategy rarely gets 'stopped' out during volatile price swings


Low Risk Trading with a Maximum Risk of 1.4% and Unlimited Profit Potential

Today's S&P 500 Index price chart below shows lots of volatility and price swings but no clear price trend. It is difficult to profit from the long or short side in this type of market.

Over the past four years we have experienced a global financial meltdown, severe recession and bear market, high unemployment, increased market volatility and an uncertain economy. This financial turmoil has made it very difficult for the average investor to realize a consistent return on investment.

In the Market Volatility Profit Secrets webinar we will explore low risk strategies that have been performing well in this type of market. For example, using a little known strategy, my Royal Dutch Petroleum trade has a maximum risk of 1.4% over a 21 month period but unlimited upside potential.

Strategy Produces 69% Average Return with No Losing Trades

The cash dividend strategy invests in dividend paying stocks. We reinvest cash dividends in additional shares of stock which enables us to compound our returns. In this video we will learn how this low risk strategy has produced excellent returns despite the market volatility and uncertain economy.

  • Dividend Strategy Open Trade Results
  • $99,943 in Profits, Average Return 69%
  • All Trades Profitable

Dividend Double Dipping

Writing monthly covered calls on high yielding stocks is one of the best overall investing strategies as you get to collect two income streams the quarterly dividend and the monthly cash received from writing covered calls. I like to invest in companies that consistently raise their dividends as these companies have a proven track record of producing profits that enable them to increase their dividend.

I like to reinvest cash dividends in additional shares of stock which enables me to compound my returns. I also reinvest the cash received from selling monthly call options which provides a double compounding effect.

For example, reinvesting quarterly dividends for Mark West Energy stock has reduced my cost basis for the stock to 17.02. Mark West Energy pays a $2.60 annual dividend so my annual yield is 15.2%. Writing monthly call options for MWE has an annualized return potential of about 45.8%. The total annual return potential for this stock is 61%.

In this video we will learn how this low risk strategy has produced excellent returns despite the market volatility and uncertain economy.

  • Mark West Energy cost basis 17.02
  • Annual Dividend 2.60 = 15.2%
  • Yield Buy Write Annual Return Potential 45.8%
  • Total Annual Return Potential 61.0%