How To Make $215.05 in 3 Minutes

As some of you may know I’ve been trading options for years as a primary source of income. In particular, selling put options has been the main trade type and I have deemed it one of the safest and most consistent ways to generate income in the market.

It’s knowledge every investor should have. Still, I know many of you have yet to sell a put option. Or trade any type of option for that manner. So my goal is to share this knowledge.

Many people get scared when they hear the word “options.” They think any trade involving options is too risky or only for professional traders and hedge fund managers. And you may have been discouraged by less skilled brokers to keep away from these “finical weapons of mass destruction” as Warren Buffet once stated.

But like anything else it all depends on how you use it. If used the wrong way sure you can lose a lot. Just like properly using a gun or a pack of matches. You wouldn’t give either to someone who has no idea how they work, especially a child.

But by using a few simple rules and strategies you too can generate an extra income.The key is to identify high-quality companies that you would like to own. Like me, you may have a list of favorite companies you like to be invested in. Most of them pay a dividend. By selling a put on that company, you name the price you’re willing to pay for shares and it is always at a discount to the current price. So you are already starting the trade in the black.

Moreover, I also use simple charting techniques to increase the odds of success in a trade that already has a high probability of success and leverage. You don’t need to know any complicated mathematical calculations as implied by the Black-Scholes formula. I learned about this many years ago and have found it to make things unnecessarily complicated. So I no longer use it. Keep it simple.

The video below is a brief clip from my comprehensive options course, whereby I teach you all the techniques you need to do this type of trade. In this video I open up my broker account and demonstrate during open market hours how to make $215.05 in 3 minutes, like the title claims:

No use of complicated mathematics, just clear simple observation of market psychology. If I could convince you that selling puts was a safe and profitable strategy, would you be willing to make it a part of your permanent investing future? Would you like to have a home business that generates cash with no product or selling involved?

I’ve created a course that shows you exactly how I generate thousands of dollars a month implementing this strategy. I demonstrate the set ups to look for to increase your odds of success and how to manage the risk. I will also send you a free report detailing an actual, typicall trade on how I do this strategy for an income:

>>>CLICK HERE TO LEARN MORE ABOUT MY EASY OPTIONS TRADING COURSE AND GET YOUR FREE REPORT

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To Your Success!

Joe Sabatucci

support@joesabatucci.com

Skype: Joesab711

 

Market Casino – Why Robert DeNiro Was Right

Ace Rothstein: Three jackpots in 20 minutes? You didn’t see the scam? You didn’t see what was going on?

Don Ward: Well, there’s no way to determine that…

Ace Rothstein: Yes there is! An infallible way, they won!

Don Ward: Well, it’s a casino! People gotta win sometimes.

Ace Rothstein: [getting more irritated] Now you’re insulting my intelligence.Market Casino

 

This famous scene from the 1995 movie “Casino” says it all about how casinos work. The odds are stacked against the players who are all putting their quarters, their “play money” and sometimes their rent money into rows of legal bandits. All looking for the big score that rarely comes.

How are the casinos are able to build new enormous sky towering buildings every year? Not because people are winning. The casino owners look down at the casino floor, laughing all the way to their yachts.

Many people equate the stock market with a casino and in many ways they are right. And this is especially true with options trading. Many traders will buy call options hoping for a short term big move and make a quick killing. In the market casino they fail to understand is when you buy an option you must get 3 things correct:

1. Direction

2. Duration

3. Magnitude

Get any one of these 3 wrong, you lose:

Oh, stock fell instead of going up? You Lose

Oh, good news came out after expiration? You Lose

Oh, good news came out but move wasn’t big enough? You Lose

Yes, if you buy an option, you are the poor schmoe throwing your quarters in the machine while slurping down your complimentary watered down drink and losing your rent money.

 

I prefer being the casino owner, I sell options and it makes me a good income. You should consider this as your primary trading vehicle as well.

I prefer being the casino owner, I sell options and it makes me a good income. You should consider this as your primary trading vehicle as well.

It is the IDEAL home business. No selling, no product. My system shows you how to do this.

And no one will insult your intelligence

>>> Click Here To Learn About My Easy Option Trading Course

Are Your Shares Worthless?

There are definite techniques to finding what I call “wham bam”  investments when you know what to look for and how to find it . The kind of stock investments that could make you a fortune over time – with very little risk. Many times, such good investments are worth enough to pass on to your next generation. So what’s one of the best secrets to look for? In a nutshell, you want a company that gushes free cash flow. Free cash flow (FCF) is all the excess cash generated after a business pays all its expenses and after it reinvests enough cash to maintain and grow the business. Many investors concentrate on earnings, which can be swayed by creative accounting practices. But cash flow is harder to mask.

When you buy a stock, you’re buying a piece of a business. It’s not a debt interest, and it’s not a preferred stock interest, it is equity. Equity is a “residual claim” on the earnings of a business.  It’s what’s  left over for us small investors after the cost of doing business is paid up, including   secured creditors, salary and wages, taxes, trade creditors, unsecured creditors, and preferred stock holders.ID-10051724

Only after all these obligations are met can you expect your shares to be worth anything. To be sure, excess cash flow is the one thing that gives your stock nearly all of its value. That is what the title of this article is all about. Without the ability to generate lots of extra cash, the shares you hold are worthless. As a person who is in business for myself, I want my business to pay me as much cash as possible during the time I run it. And that’s true whether in my case I  own 100% of the business or whether  I own just one share of another great company.

Where’s waldo

You can find cash flow  for any company in Yahoo finance. Just go to the cash flow section of a company’s financial statements on the left of the quote screen and subtract capital expenditures from operating cash flow. Sometimes operating cash flow may be defined or fall into the category of call “cash from operations” or “net cash from operations.” Sometimes capital expenditures are called “additions to property and equipment” or something similar. Let’s take an example using one of my favorite long time and option trading investments, Microsoft (MSFT)

Using the data from this page (I’m using annual report in this example) we see “total cash flow from operating activities” at $28.83 billion. If you now subtract $4.26 billion from the “capital expenditures” column, you get $24.57 billion as the FCF.

That’s a lot of dineros. Which is why I like Microsoft as a long term and safe option trading vehicle, they are one of the greatest cash flow behemoths around. You should note,however, while a company may generate lots of cash, it might not use it to benefit shareholders. MSFT has made some questionable past acquisitions e.g. Skype, but with the new CEO and board members I believe wiser heads will prevail in Microsoft’s acquisition future.

You look Marvell-ous

Another great example of one of my favorite investment companies is Marvell (NASDAQ:MRVL).  Looking their sheet, you can see they generated $163 million in FCF. They reported favorable earnings last Thursday, now having $2 billion on its balance sheet and no debt. Shares trade at 13 times forward earnings vs the S&P’s 15. Sales are strong due to their chips being used in the new XBOX one and Play Station . FCF eventually triumph’s over bad news. Take Target(TGT) as an example, which recently plummeted due to data breach.In the last 12 months, they generated $3.4 billion in FCF. That’s over 3 times as much FCF then it paid in dividends. The data breach won’t affect it’s cash flow. Target shares have already begun to recover, just as TJX and Walmart recovered from their scandals.

Conclusions

Free cash flow is essential to knowing your business as it’s the amount of excess cash available after a business pays its expenses thereby creating shareholder value, which is how you make the most money.

Maximize Your Returns With Shareholder Yield

I haven’t heard anyone on CNBC talking about it, but a relatively new exchange-traded fund beat the return of the S&P 500 over the last year. This investment gets little to no attention from mainstream financial media. This fund doesn’t take complicated risks like a hedge fund would. By following a few simple principles that would make Warren Buffet proud, it holds the best shareholder-friendly stocks, leading to impressive returns.

This recent outperformance was no fluke, and it didn’t happen because of a special one-time opportunity in a high-growth area. This simple strategy has a long-term track record of market-beating returns. According to Jim O’Shaughnessy’s book What Works On Wall Street , this strategy would have turned $10,000 into nearly $1.8 billion from 1928 through 2009. I expect it to outperform the overall market for decades to come, as it was one of the top-performing strategies out of hundreds Jim looked at. It’s an ideal investment for the beginning Fool to put to work today, because the fund I mentioned offers a “one click” way to participate in the strategy.

And the winner is … 
The fund is the Cambria Shareholder Yield ETF (NYSEMKT: SYLD) . Its objective is simple: to own a basket of the best companies based on shareholder yield (more on that to follow). Its expense ratio of 0.59% is a reasonable cost for active management. Since it was founded in May of last year, the Cambria Shareholder Yield Fund has beaten the S&P 500 by almost 3%:

SYLD Chart

SYLD data by YCharts .

The concept of shareholder yield 
Mebane Faber, co-founder and CIO of Cambria Investments, recently published an e-book on the idea of shareholder yield. Faber’s idea was to find a simple method to identify the world’s most shareholder-friendly businesses — companies that consistently return cash to shareholders.

Shareholder yield is defined as the sum of three factors: dividend yield, net share buybacks (buybacks minus new stock issuance), and net debt pay-down. Faber systematically covers each of these three factors and presents evidence that each factor individually contributes to the portfolio’s outperformance. He concludes with data showing that the combination of all three factors outperforms each of the three individually — as with my all-time favorite band, The Beatles, the whole is greater than the sum of its parts.

Based on Faber’s findings, buying companies that return the most cash to investors results in market-beating returns. Since 1982, you could have earned an average of 15% per year with this strategy, compared to just an annualized 11% return on the S&P 500. Over 30 years, that leads to nearly three times the gains of simply owning the broader stock market.

That’s an impressive result, but it doesn’t end there. Next, using the “trend is your friend” principal, he includes stocks that are in an uptrend. This increased a 15% annual gain to 16.8%. Lest you think that’s a marginal difference, that simple 1.8% increase nearly doubles your return over 30 years.

With these amazing results in hand, Faber launched the Cambria Shareholder Yield Fund to put his theory to work — and it’s off to a stellar start. It’s the kind of fund that you want to buy and hold today and forget about for the next 30 years.

Recently, he launched a fund that primarily invests in European stocks: the Cambria Foreign Shareholder Yield Fund (NYSEMKT: FYLD) . The fund’s P/E ratio is around 12, which is lower than the corresponding U.S. market, which is valued around 15 times earnings. Moreover, the average dividend yield of the holdings is around 5% — double that of U.S. stock dividends. And of course, these companies are also buying back shares — part of Mebane’s shareholder yield strategy. I believe the recent weakness in emerging markets and Europe presents an excellent opportunity to put some money to work in the foreign sector via this fund.

Survey: What is Your Biggest Question About Option Trading For Income?

Dear Friend,

I know that your time is valuable, so I’ll get right to the point.

I need your advice!

I’m putting the finishing touches on a new product called “Safe Option Income Trading” and want to make sure that I don’t leave anything out.

So, will you let me know your biggest question about trading options for income? It could be anything… even if you think it’s silly.

All you have to do it type your question in the box below and click submit.

In exchange for your advice, if you also leave your email address, I’ll send you a free copy of the product before we release it to the market. (Should be ready in a few weeks.)

Ok, here’s the easy form:

What is your #1 question about trading options for income?

Thank you very much for helping make this the best “Safe Option Income Trading” resource possible.

Sincerely,
Joe