Income generator trading strategy pdf

income generator trading strategy pdf

profit and loss on the combined stock and option position at expiration. The opinions expressed are the authors own. So the two possible outcomes are either buying the stock more cheaply (at the strike price less the premium received) or just receiving the premium (the option is not exercised, so the investor keeps the premium. The income received from the call option sold provides a small hedge on the stock and allows an investor to earn premium income, in return for temporarily surrendering some of the stock's upside potential. Just ask your friends and you will see just how many beginning traders are losing their shirt! . Weekly options are structured like conventional monthly options, but they expire each week. Its not time consuming. . It is the same as that of the covered call. Other premium income-generating strategies that offer higher risk include short straddles and strangles.

Readers will learn the fundamental mechanisms that drive weekly options, the market forces that affect them, and the analysis techniques that help them manage trades. It is also known as a covered strangle as both a put and a call are sold with different strikes, and the underlying stock to be sold if the call is exercised is already held. We use MT4 trading platform and these are standard indicators that comes with the standard MT4 platform. Individuals should not enter into Options transactions until they have read and understood the risk disclosure document, Characteristics and Risks of Standardized Options, which may be obtained from your broker, from any exchange on which options are traded or by visiting www. It is worth noting that US exchange-traded equity options can be traded out. This "select group chooses the days they work. . The strategy involves writing a call that is covered by an equivalent long stock position. In fact, this strategy used the standard Forex Indicators that come with your trading platforms.