The Tycoon Report

Position Yourself to Profit No Matter Which Way the market Goes

If you check out the last 4 weekly e-mails that I sent out you see that I was shouting from rooftops that this market is presenting us with an exceptionally profitable time to sell covered calls and rake in additional profits on your current stock positions.

That's Right. The last 4 weeks have been 4 of the best weeks to sell covered calls that we have seen in years.

It's not too late yet! Get in the game if you haven't already! You can still enhance your portfolio's profit potential by having 5-10-15% of the value of your stock position deposited into your account, immediately! You don't even have to sell your stocks yet. You may even own stocks that are still rallying - and those are the perfect stocks to use for this profit enhancing, risk reducing strategy.

In the last 4 weeks The NASDAQ & the S&P500 hit 4 year highs and the Dow came pretty close. I hear several traders saying that based on the light volume in these latest rallies; they think that the market has no legs (support).

Some others say, "Who cares, the market broke a four year high, and I remain bullish." No matter which side you're on, if you are going to hold on to any of your stock positions here, you can do what I do and either enhance your performance or reduce your short-term loss by selling covered calls.

Today, in a brief review of my the last few weekly e-mails that I sent out, I'll show you just how important it is to implement simple options strategies and how it can reduce your risk and at the same time enhance your profits. Why a review of the last 4 weekly emails that I sent?

Because I have been reading your e-mails lately, thanking me because I use real life examples when illustrating the possibilities of making extra profits by selling covered calls. I am surprised that they affected so many of you. Many of you happen to own the stocks that I use as examples.

(While I appreciate the inquiries, I am not accepting any clients these days on a money management basis, and I can't give you personal advice. I'm glad though, that some of you made money on some of my examples.) Selling covered calls can magnify the profits in your stock portfolio.

Focus on these examples that I mentioned in the last 4 weeks you will see what I mean.

The examples that I used were:

GOOGLE (NASDAQ-GOOG) when it was at $300 - I used this as an example of taking in an extra 18 points by selling someone the right to buy your Google stock at $320.

If you did so, then you are happy since the stock is now at $285. Rather than sitting on your stock position waiting for the market to have it's way with you, you took in an extra $18 points which means that although you own the stock that went down 15 points, you are still up 3 poInts from the time you sold the call.

That's right! The stock traded 15 points lower, and you are up 3 points. You reduced your risk. You reduced the power of the market. On the flip side; if the stock traded to $325, you would have netted $340 per share, even if it never traded at that price.

HALLIBURTON (NYSE-HAL) when it was at $55 - I used this as another example of taking extra profits instead of just selling the stock at $55. The stock traded as high as $60.19 but sits today at $56.75. In my example I mentioned selling calls that would pay you $2.60 per share, for the right to buy your stock from you at $55.00. If you employed my strategy, even if your Halliburton is sold today you will net $57.60 instead of the market price of $56.75 and you'd make more than the people who don't bother selling calls. The better news is that even if you sold your stock at the end of the year at $53, your net sale would be $55.60.

Even NETFLIX (NASDAQ-NFLX) - In my example last week, I mentioned that stockholders could sell the September $22.50 calls for $1.05. That means that someone paid you $1.05 for every share of Netflix that you own. That person has only 4 more weeks to buy your stock from you at $22.50 (40 cents above today's price). If you employed the covered call strategy and NFLX does in fact trade above $22.50, although someone would buy your stock from you at $22.50, your net sale price would be $23.55 ($22.50 $1.05.)

Today the stock trades at $22.10. If you employed my strategy, even if the stock trades flat for 4 weeks, you could sell it, and you could end up netting $23.15 per share without the stock ever trading there.

There was one other real life example. A Generic Pharmaceutical company that I did not even mention the name of, but some of you figured it out anyway, which was American Pharmaceutical Partners (NASDAQ-APPX.) I gave 7 reasons why I liked the idea of PURCHASING the October $42.50 call options.

I got a few e-mails from subscribers asking why I didn't revile the name of the company before the option returned over 100% in 2 days. You can check out the answer in this month's issue of Fallen Angel Stocks in the Q&A section. Today was a simple review which was done in order to illustrate the importance, and the effect of simple options strategies to enhance your portfolio.

Going forward, weather I talk about options strategies, or otherwise, I'll use real life examples again.