Using Stock Options to Pay Yourself 5% Monthly Dividends

Sometimes we forget the basics.

In our video series, there's a lesson called "The Secret to Consistent 20-40% Annual Returns on Stocks" and I hope you've seen it.  Although the low implied volatility of the market has made it a rough year for option selling, we were still able to scratch out just over 40% profits in four months in our paired Long-Term and Short-Term Portfolios.    Our other virtual portfolios are also performing very well with the Options Opportunity Portfolio up over 100% in 2016 and, surprisingly, our very conservative Butterfly Portfolio is up over 60% due to some not very conservative bullish adjustments we made in the February dip.  On the whole, though, we accomplished all this by following the BASIC strategies we teach at Philstockworld, not by gambling! 

I've written this article before, the first draft was on May 14th of 2016 so let's start by showing you how our picks from that article did so MAYBE you will take the rest of what we have to teach you seriously – time is money and, at PSW – we don't waste either!  

Trade Idea #1 was Barrick Gold (ABX) using the following combination:

Buy 1,000 shares of ABX for $18.40 ($18,400)

Sell 10 June $18 calls for $1.40 ($1,400) 

 

IN PROGRESS

 

 

 

 

These are conservative picks that get exceptional returns.  Certainly we are not adverse to gambling, gambling is fun – but fun means fun, which means it's a small part of our total investing portfolio while the vast bulk of our money is SENSIBLY INVESTED in safer strategies that are designed to grind out consistently good returns over many years.  We have discussed the long-term advantages of compounding annual growth in "How to Get Rich Slowly" and now we'll begin discussing some basic strategies that will help you generate those consistent annual returns to put you on a path to a healthy, wealthy retirement.

In the "7 Steps" video, we're discussing a basic covered call strategy and we delve into the Fundamentals of stock selection.  At the time (Sept 2013), we were using ABX, which was trading at $19.15 and we sold the November $19 calls (45 days…
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