Options Trading: Generating Real Income in a Zero Interest World: A Guide to Generating Reliable Income by Trading Options on Blue Chip Stocks, Pope Joel, Merrill Michael

Mike had already enjoyed following the market and was invested in biotech due to his involvement in the industry. Even though he had numerous successes, he soon learned one loss could wipe out all the previous gains and realized he needed to change his approach. Mike was introduced to Joel at a dinner party and was intrigued by Joels approach. Within months, Mike was following Joels strategy and, on a path, to generating consistent income well above market yields.

Over the past few years Joel and Mike have enjoyed sharing their experience with various friends and acquaintances and would now like to share their strategy with you.

In chess, the perfect move is aggressive, defensive and leaves flexibility. We want the same approach in our investment strategy. In addition to being a method to generate income during a rising market, we believe our strategy to be equally effective during flat or moderately declining markets. Let us assume there is a significant recession and stock prices crater far below our original basis. Our strategy is to collect a 3-4% dividend (or higher) from a blue-chip stock augmented by additional yields via selling covered calls while the economy stabilizes, and the stock market subsequently recovers. By utilizing our strategy, you are aggressively earning good returns regardless of the stocks short-term performance. You take advantage of a market that is relatively flat, or slowly grinding up, and are positioned well for a downturn with the reliability of blue-chip stock dividends. Equally, if not more important, since options are so liquid and there are so many defensive strategies, we believe options are far more flexible than stock ownership in any market.