An Income Strategy that Produces 44.4% Worth of Annual Income . . . in Gold

After a recent survey, it has come to my attention that many, if not most, of you are seeking a reliable income strategy . . . a  reliable strategy that can provide you with consistent income without an overwhelming amount of risk.

If you fall into category above, here is the income strategy you must start using now.

This is a strategy that has allowed us to reap returns of 130.1% in SPDR Gold Shares ETF (GLD), 99.1% in iShares 20+ Year Treasury Bond ETF, 36% in Verizon (VZ), 36.1% in Pfizer (PFE), 73% in United Rentals (URI), 98.9% in D.R. Horton (DHI), 46.5% in KB Homes (KBH) and even 24.7% in HP Inc. (HP) while the stock is down 10.6%.

Overall, by using this strategy we are not only able to exceed the stock’s performance by three to six times, but we are also able to minimize losses. For instance, like HP, Sketcher’s stock is down, roughly 17.3%, but we have minimized all of those losses by actually creating a net gain of 2.3%. Again, it proves the power of our income strategy.

My income strategy is similar to a traditional covered call strategy, with one exception in the mechanics. Rather than buying 100 or more shares of stock, an investor simply buys an in-the-money LEAPS call and sells a near-term out-of-the-money call against it.

LEAPS, or long-term equity anticipation securities, are basically options contracts with an expiration date longer than one year, at the time of the trade. Mechanically, LEAPS are no different than short-term options, but the longer duration offered through a LEAPS contract gives an investor the opportunity for long-term exposure.

Other than reducing the capital required, the reason we purchase LEAPS is to minimize the extrinsic value and theta decay. Basically, a poor man’s covered call is viewed as a diagonal trade with a significantly longer duration.

How I Approach Our Income Strategy

Let’s take a look at Gold.

income strategySo far in 2020, the gold ETF, GLD, is up 19.5%. Our position using our income strategy is up 130.1% . . . .and we’ve managed to “pay ourselves” 16 times over the course of the year for a total of $2,738. That’s with the bare minimum investment of just $2,145.

The first step is to choose an appropriate LEAPS contract to replace buying 100 shares of GLD.

If we were to buy 100 shares of GLD at $175.64 per share, our capital requirement would be a minimum of $17,564 plus commissions ($175.64 times 100 shares).

For some investors, this just isn’t affordable. For others, due to the capital outlay it’s hard to take on that large of a capital position while remaining properly diversified. I get it, and so does the options market. That  is why there an alternative, an alternative that many hedge funds have decided to employ due to the overall capital savings and reliable, consistent income payouts that this strategy provides.

If we look at GLD’s option chain, we will quickly notice that the expiration cycle with the longest duration is the Jan. 20, 2023 cycle, which has roughly 791 days left until expiration.

income strategy

We can buy one options contract, which is equivalent to 100 shares of GLD, for roughly $43, if not cheaper. Remember, always use a limit order – never buy at the ask price, which in this case is $44.35.

If we buy the $140 strike for $43 we are out $4,300, rather than the $17,564 we would spend for 100 shares of GLD. That’s a savings on capital required of 75.5%. Now we have the ability to use the capital saved ($13,264) to work in other ways.

What About Income?

The next step is to sell an out-of-the-money call against our LEAPS contract. This is how we create our steady stream of consistent, reliable income going. I look at it like creating my own dividend 10-15 times year.

income strategy

We can sell the December $180.5 strike with 34 days left until expiration. Of course, we have lots of choices, but this is something I discuss, in great detail, in my live webinars.

So again, let’s say we decide to sell the $180.5 strike for $1.57, or $157, against our $140 LEAPS contract. By doing so, we are bringing in 3.7% roughly every 30 days. That’s right, 3.7% every 30 days. It might sound like much at the start, but over the course of the year we are selling 44.4% worth of income.

And the best part, we can continue to sell calls against our LEAPS contract every month or so to lower the total capital outlay . . . in perpetuity.  But remember, options have a limited life, so when we get closer to the LEAPS contract’s expiration, we will simply sell the contract and use the proceeds to continue our income strategy.

I will be going over all the facets of my income strategy next Tuesday. The strategy has led to out-sized gains in good and bad markets. One thing is for certain, if you are an income investor…you will not want to miss out on learning how to use this powerful income strategy. To learn more about poor man’s covered calls – and other income-producing options strategies – I invite you to attend my upcoming webinar. Just click here for more details and I’ll see you on Tuesday.

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Did You Collect Your $735 Overnight ‘Profit Check’ from Walmart This Week?

Third-quarter earnings reporting season has been one for the record books in terms of positive earnings surprises (click here to cash in now).third-quarter earnings

Over 90% of S&P 500 companies have reported third-quarter results as of the end of last week. Fully 84% of those reports have been positive surprises, with actual results above estimates. Often, FAR above estimates.

This is the prime time for you to cash in with a special earnings season strategy that captures quick, overnight gains. In fact, this strategy is right on the money 87% of the time, delivering a cumulative gain of 222.4% in 2020 alone.

This strategy produces steady, predictable profits.

  • Gains like $735 in blue-chip retailer Walmart this week . . .
  • Or the $350 profit earned on Walt Disney Co. at the end of last week . . .
  • And the $680 gain earned from CVS Healthcare Corp.

You get the picture. And the best part is, all of these gains were earned in LESS than 24 hours.

This system is like having your own printing press that spits out overnight profit checks from some of America’s biggest and best blue-chip stocks over and over again.

And this earnings season has been a golden opportunity for you to cash in.

S&P 500 companies been beating forecasts by a 9-to-1 ratio this season. They’re not just inching ahead of forecasts by a penny of two, either. They are absolutely crushing it.

On average, companies are posting profits that are  19.4% ABOVE Wall Street estimates. That is simply incredible. For comparison, the average profit beat rate over the last five years is just 5.6% above estimates.

third-quarter earnings

This earnings season is three-and-a-half TIMES better than average. And all you have to do is place this one simple trade the day before an earnings report . . .

And then cash out the very next day with $350 . . .  $680 . . .  and even $735 in steady cash profits over and over again just like clockwork.

And as you can see in the chart above, the positive profit surprises have been very broad-based this season. Consumer, Energy and Industrial stocks are leading with the most earning surprises.

But every single sector is beating expectations.

My colleague Andy Crowder knows how to take full advantage of this. He developed a unique earnings-season strategy that can deliver consistent, overnight profit opportunities.

This strategy is up 224.4% this year alone and has gained 920.2% since he began this strategy.

Click here to get the urgent details – because before you know it, earnings season will be over.

Good investing,

Mike Burnick

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Overnight Gains: Your Trading Window Is Closing Fast

Third-quarter earnings season is winding down, but we are NOT done yet earning gains of 222.4% this year alone in “Overnight Trading.”

Click here to find out how and start cashing in.

It has everything to do with corporate earnings seasonality. You see, publicly traded companies report their financial results every three months. This opens up a “trading window” for you to grab consistent, often overnight gains.

But allow me to let you in on a little secret: You DO NOT need to know whether a stock beats or misses its profit estimates to bank consistent profits and overnight gains using this earnings season strategy.

The beauty of this proven strategy is: You place one simple trade the day before a stock reports earnings and cash out with profits of $990 . . . $1,260 . . . . and even $2,200 . . . . in just 24-hours or less.

Right now we’re just past the peak of earnings season, so your “trading window” for these quick gains is closing fast. But the good news is that this week dozens more blue-chip stocks will post results, as you can see in the table above.

Every single report is another massive profit opportunity for you to cash in with a strategy that has been right on the money 88% of the time. All you need is $500 to get started.

My colleague Andy Crowder developed this exclusive earnings season “Overnight Trading” strategy and he’s delivered an awesome track record with overnight gains. In fact, he’s delivered an incredible 224.4% this year alone.

overnight gains

So,  check it out  for yourself here. Learn the secret to his system that delivered an 88.4% win rate on all his trades this year. And you’ll discover how to use his system of overnight gains to turn $5,000 into $2,549,704 in LESS than three years.

Click here now for all the details before this valuable trading window closes.

Good investing,

Mike Burnick

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How to Make a Successful Disney Trade Next Week

Successful options traders share one common trait: They all follow a quant-based approach.DISNEY trade

The strategy I am about to introduce has allowed us to reap over 898.5% in gains since October 2017 (click here for details). That’s right, 898.5% . . . and we have the track record of three years to back it up.

Some of you may have participated in the recent trade in CVS that I mentioned here last Sunday. If so, you could have reaped a one-day gain of 13.6%. So far this earnings season, we have generated a total return of 53.7%.

You see, years ago, I never thought it made sense to trade earnings. It was a foreign concept due to numerous limitations (commissions, liquidity, no weekly expirations). Trading earnings announcements just didn’t make sense from an efficiency standpoint.

Well, things have dramatically changed.

Add 52 weekly expiration cycles, a variety of highly liquid products and the clarity of a once unknown calculation . . . and we now have the opportunity to trade earnings news in an efficient, informed and highly profitable manner.

Today I want to focus on the “unknown calculation” . . .  It’s a major advance in the way all traders approach the market, especially during earnings season.

The unknown calculation? Expected move.

Well, I’m sure most of you are asking, what is “expected move”?

Expected move is the price movement the market expects during a given expiration cycle. It’s the key to successfully trading earnings announcements. Fortunately, now we have tools that allow us to see, in real-time, the expected move for any given underlying stock around its earnings announcement.

This one calculation gives us the supply and demand for any individual security in real-time, and that is incredible information to have if you are trading during earnings season.

During the coming week I will be sending out potential trades in McDonald’s, D.R. Horton, Disney, Cisco Systems and several others. To learn how to use this approach and to get details on the trades, please click here to reserve a spot at my upcoming briefing.

Let’s look at Disney (NYSE: DIS) trade on earnings.The Disney earnings report is due on Nov.  12 after the closing bell.

As expected, implied volatility (IV) is high as we move closer to the uncertainty of the Disney earnings announcement. We ALWAYS want to see heightened levels of IV when seeking trading opportunities around earnings. Increased levels of IV means inflated options prices . . . basically, that means we can sell options for more premium than usual.

To evaluate a Disney trade, we have several tools at our disposal to figure out what the expected move is for Disney immediately following its earnings announcement. You can see the expected move embedded in the options chain on the Tastyworks platform. The expected move is from $120 to $132.50, for an expected move or range of $12.50.

Knowing that the expected move is $12.50 gives us the opportunity to utilize a variety of strategies based on our market assumptions in Disney (bullish, bearish or neutral).

I tend to stick with risk-defined, neutral-based strategies. This one approach has been the leading factor in the majority of the 898.5% gains I have reaped since starting the strategy just under three years ago.

Since we know the expected move in Disney is $12.50 after Disney earnings are reported, we can create a range-bound Disney trade around the expected range as seen in the options chain above. And as long as Disney shares trade within that range immediately following the Disney earnings announcement, we should be able to buy back the spread for a nice profit due to volatility crush.

The probability of that occurring is roughly 89% on the downside and over 86% on the upside.

The increase in volatility, followed by the rapid decline, affords us the opportunity to take advantage of some nice profits as we make a Disney trade.

I hope this short article on expected move gives you the insight you need to trade earnings and make sound judgments on every earnings trade you decide to take on.

If you would like to know more about the strategy, risk-management techniques and more importantly, how we have reaped over 898% since we started to trade earnings, please click here. I’ll take all of your questions during this deep-dive event.

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19-Hour Trade on Wednesday . . . for a One-Day, 25% Return

Earnings season is now in full swing. As a result, the opportunities for earnings season trades are plentifulearnings season trades.

So far, during the early part of this earnings season, we’ve managed to place two earnings season trades (Goldman Sachs and American Express). Both were winners. Our returns since we started the portfolio three years ago stands at 869.5%.

Go here to see how this can earn you triple-digit gains.

But I’m not here just to dwell on the past.

I have a few trades on the agenda for next week and today I want to focus on one specific earnings play: Visa.

Visa releases its earnings report after the bell on Wednesday . . . and I plan on making this earnings season trade detailed here.

Best part about the earnings season trade is that I don’t care about the numbers that are released. I don’t care about EPS, revenues . . . any of it.

My earnings season trades are based on a quantitative approach . . . an approach based on hard statistics.

The trade is purely mechanical, based solely on what the market is telling me at the time.

Now I can see that you may be scratching your head right now, asking yourself, what is he talking about? What does the market tell us about Visa that makes this trade so interesting?

Well, it’s something called the expected move or expected range. The market gives  us this information in real-time and it is a wonderful way to lay the foundation for all of your trades, now and certainly in the future.

Here is the expected range for Visa.


You see, the expected move, as highlighted in the peach-colored vertical bar above,  tells us that the market expects Visa to trade within the highlighted range of roughly $190 to $207.50 through Oct. 30.

What most investors and traders alike don’t realize: 80% of stocks stay inside their expected range at the expiration. That’s right, 80%.

Since we know this fact, the expected move allows us to create an easy range-bound trade based on probabilities. It’s also what has allowed us to reap consistent returns, earnings season after earnings season, for the last three years.

Now, my preference when I’m placing earnings season trades is to use a high-probability approach. I like to select these trades that have probabilities above 80%.

So again, since the expected range of Visa is between $190 and $207.50. I want to place a trade, with an 80% probability of success or higher, while still bringing in an adequate amount of premium. Again, these are easy, straightforward trades to place. You just have to follow the mechanics.

Now, let’s go back to the probabilities.

As you can see in the images below, if we choose strikes outside of the expected range, the probability of profiting with our trade is 89.57% on the high end of the range and 89.78% on the low end of the range.

Call Side (upside):

EARNINGS SEASON TRADESSo overall, our probability on the trade is over 89%. Not bad. And our potential return . . . roughly 25%. And remember, this is for a one-day trade.

On Wednesday I WILL be placing a trade in Visa. If you want to see how I trade Visa and how you could potentially make 25% next Wednesday, click here to register for my upcoming webinar. I will be going over all the mechanics of the trade, including the exact strikes, price and more.

See you all there!

Good trading,


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Did You Cash In With 20% Gains on Starbucks?

I’m mainly a black coffee drinker. But I’ll occasionally indulge with a Starbucks Caramel Macchiato.earnings reports

Last week Starbucks reported its quarterly results. And in less than 24 hours you could have earned a 20% profit from a simple earnings season trade with Starbucks. With an investment of only $500, that’s enough profit to treat yourself to 20 Caramel Macchiatos with change left over.

Click here now to find out how and start cashing in.

We are in the peak of earnings reports season right now when S&P 500 companies report their quarterly sales and profit results. That means right now is prime time for earning consistent profits . . . just like Starbucks.

You can also cash in on hundreds of other profit opportunities by using a proven Earnings Season Strategy that has racked up a cumulative gains of 224.4% this year alone.

This week alone dozens of blue-chip stocks are posting third-quarter earnings reports. And every single report is another opportunity for you to cash in with a strategy that has been right on the money 87% of the time.

Just take a look at this list of household names set to release earnings reports over the next five days:

  • General Motors, Bristol-Myers Squibb and Alibaba on Thursday
  • Peloton, CVS Healthcare and Roku results will be out by the opening bell Friday
  • McDonald’s, Occidental Petroleum and Nikola report on Monday

These blue-chip stocks, plus many more, are releasing earnings reports in the weeks ahead. And it creates plenty of overnight profit opportunities for you – just like the 93% overnight profit you could have earned on Starbucks – with this earnings season strategy.

So far this earnings season, 86% of S&P 500 companies have reported positive earnings surprises. According to researchers at FactSet, that’s the highest beat rate they’ve EVER seen since they started tracking profit hits and misses.

But let me let you in on a little secret.

You DO NOT need to know whether a stock beats or misses its profit estimated to bank consistent profits using this strategy.

The beauty of this proven strategy is: You place one simple trade the day before a stock reports earnings … and cash out with profits of $990 … $1,260 … and even $2,200 over and over again. Typically, in LESS than 24 hours.

And all you need is $500 to get started.

If this sounds too good to be true, I’m here to tell you that my colleague Andy Crowder developed this strategy . . . and he has the track record to back it up.

A track record full of rich profit opportunities during earnings season that’s up an incredible 224.4% this year alone.

Take just a few minutes, and see for yourself right here – PROOF of these earnings season trades included.

Click here now for all the details before earnings season ends.

Good investing,

Mike Burnick

The post Did You Cash In With 20% Gains on Starbucks? appeared first on Wyatt Investment Research.

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