Income investors love to sell options for an extra weekly cash payday …
But there are some weeks when the cash piles up even faster…like in 24 hours or less.
Last week we closed out one of those “24 hour cash wonder” trades for a nice easy profit.
EOG Resources (EOG) is the best “fracker” in the world – by far – and Wall Street knows it. The company boasts the best fields, the best technology and the best management. When oil prices fall sharply and EOG sells off, it bounces back, and that volatility means great premiums for option sellers.
Since EOG is a Houston based company, the destruction left by Hurricane Harvey was expected to cripple the energy business in Texas and force oil prices higher.
EOG stock price sold off but as I said before this stock is resilient and hit a support level at $82.50 and that’s when we sold a put option for $0.50 credit on Tuesday.
The very next day, EOG stock bounced off the 82.50 support and ran up well over $84 allowing us to close out the trade and buy back our put option for $0.05 …collecting $0.45 in net premium on Wednesday.
Now here is where it gets interesting…
If you had traded 4 contracts like many of my Options Income Blueprint (weekly paycheck link) members you would’ve collected $130 on this trade (including fees and commissions)!
… or 10 contracts would’ve let you collect $430 on the trade (after fees and commissions).
And that’s a trade that was open for less then 24 hours!
Now I’m not a day trader but our capital was exposed and at work in a little over 12 trading hours … in my book that’s a good, safe income trade.
We are income investors who sell options for rich cash premiums and when you trade them week-in and week-out like we do in my Options Income Blueprint service… you can benefit from “24 hour cash wonder” trades too.
About The Author
Michael Shulman is a 30 Year Veteran of the financial markets – as a trader, a financial analyst, a financial writer and most recently as an educator.
Mr. Shulman made his first option trade in 1985 – COMPAQ Computer calls – a position that expired worthless. His second trade broke even; the third brought him a year’s salary, a near twenty to one return on his investment. He has never looked back. He entered the financial publishing business formally in 2001 as director of research for ChangeWave Research’s institutional research business and as the writer and editor of Hedge Fund Investing.
He has published two books – Sell Short and Made in America – both of which can be found on Amazon.com, and he is a frequent contributor to reputable financial sites like Seeking Alpha, MSN, MainStreetInvestor, and Traders Reserve.
Most importantly, since 2010, he has dedicated himself to teaching income investors how to get more income from their portfolios using simple yet safe options selling strategies which produce income every week. This approach was developed from the ground up in Mr. Shulman’s own accounts, his goal to develop a strategy that cannot be replicated by institutional investors of any size and therefore independent of fads and trends that change too often to provide a consistent approach for individual traders.
His trade recommendations in his Options Income Blueprint, Perpetual Income Portfolio Club and Income Masters services maintain a 98% success ratio, meaning his trades produce the expected income 98% of the time. No one’s perfect.