Worried about the market? It’s easy to navigate downturns and print cash each and every week.
The market sold off today. The bond market took a hit as traders who forgot how to read—or think—set up their trades for next Wednesday’s Fed meeting. I’m actually being kind; anyone shorting bonds going into the summer has lost it.
What does this have to do with finding and selling a weekly call?
It’s a partial explanation of why you need not worry about the market. And if you are worried about the market, the best way to manage through a downturn is to buy now and sell calls.
Yep, buy now and sell calls.
Now, what to buy?
Growth from the company, movement in the stock independent of movement of the averages over time.
What company looks good right now?
An outfit called Apple (AAPL)—maybe you’ve heard of it—sells phones and stuff. My sarcasm is due to the detriment of the stock: Apple is the most widely held stock.
Most analysts and traders have it dead wrong…
Apple is one of the two great unassailable brands; Google is the other. Apple is the only maker of laptops and desktops that makes money on those products and the only one expanding market share.
Apple is the only maker of smartphones in the world making money, the only maker of tablets making money, the largest distributor of music in the world. It has the highest revenue and profit per square foot of retail in the world.
“Why fundamentals?” you ask. “You want a trade?”
If you trade ignoring fundamentals, you get what you deserve, which, over time, will be losses. If you trade Apple, you’ll print cash.
If you own the shares at the close today (just pennies below $99 a share) and sell the 99 call expiring this coming Friday, you’ll get a buck in premium.
That’s a little more than 1%. Small beer.
Oh, and do this fifty two times a year… that’s more than 52% a year.
I call this tactic selling the next call: a license to print money each and every week.
Think about it…