The Individual is Rising – Third Edition

submitted by jwithrow.
Click here to get the Journal of a Wayward Philosopher by Email

Journal of a Wayward Philosopher
The Individual is Rising – Third Edition

November 18, 2016
Hot Springs, VA

Dear Journal,

A specter is haunting the modern world…

Society has undergone a massive change over the past several decades – the type of change from which there is no return. This change has been the transition from the Industrial Age to the Information Age; a transition which is still in its infancy. Most people may not know this yet, but they can feel it.

The rules have changed, and many are rapidly falling behind because they still cling to the old paradigm. Yet a world of opportunity awaits those who understand what is taking place.

Continue reading “The Individual is Rising – Third Edition”

The Option Game Free Webcast

Are you looking for strategies to consistently earn extra income each month without quitting your job or taking on a ton of risk?

In the past, people have used money market accounts, certificates of deposit, and bonds to generate a little extra income while they spent their time on other endeavors. But these tried-and-true strategies for income just aren’t true anymore.

You will be extremely lucky if you can find a money market account paying more than 1% annually, and the highest tiered CD might net you 1.25% or so.

Today, U.S. Treasury bonds are paying less than 2% annually, and one-third of the world’s sovereign bonds are now in negative-yield territory!

Simply put, tying up your capital for such measly returns is a losing proposition…. but that doesn’t mean you don’t have options!

Enter: The Option Game: Safe Income in Any Market

This course is all about how to use options to generate safe monthly income no matter the market conditions. The strategies we will use to generate income with options do not involve speculating or taking on a ton of risk, however. In many cases, these strategies can actually reduce the risk of your overall portfolio.

Now we aren’t talking about day trading. We aren’t talking about chasing little moves in prices. We aren’t talking about cutting losses and trying to hit a big gain once in a while. We are talking about a comprehensive, long-term strategy to generate extra income, month in and month out.
By the way, this extra income will only require 20 minutes or so worth of work each month. That’s it. Again, this is a conservative approach so it does not require aggressive action.

These are the strategies used by hedge fund managers, proprietary Wall Street traders, and even Warren Buffet on occasion. But guess what – generating income with options is as easy as buying stocks normally if you know what you are doing!

Are you ready to learn more about the Option Game strategy? Please join the Option Game webinar on June 7th where we will discuss this topic at length and present a special offer on the course.

The broadcast will begin promptly at 8:00 pm EDT, and it will conclude with an open Q&A session.

This webcast is absolutely free with no obligations. Space is limited so register today to reserve your spot. Here’s the registration link:

There will be on-demand replay of this broadcast available for those who are interested but unable to attend at the designated time slot. All registrants will receive an email once the on-demand replay is ready.

The Majesty of Mindfulness

submitted by jwithrow.
Click here to get the Journal of a Wayward Philosopher by Email

Journal of a Wayward Philosopher
The Majesty of Mindfulness

March 11, 2016
Hot Springs, VA

“What if you could be more than you ever thought you could be? To be better than you thought you could be? Would you do it?”
– Paul Rosenberg, A Lodging of Wayfaring Men

The S&P closed out Thursday at $1,989. Gold closed at $1,273 per ounce. Crude Oil closed at $37.84 per barrel, and the 10-year Treasury rate closed at 1.93%. Bitcoin is trading around $412 per BTC today.

Dear Journal,

The 2016 presidential election cycle is now in full-force here in the United States. The yard signs are out, the politicians are demagoguing, the talking heads are raving, and the neighbors are arguing.

We need a socialist in office!”, some say. “We need to stick it to the Chinese!”, say others. “We need a knowledgeable leader who can get things done!”, others chime in. “We need more irish creme in my coffee!”, says I.

In my view, politics is a distraction for individuals at the micro level and the bane of human civilization at the macro level. Politics runs on fear, anger, hatred, envy, and intolerance – the emotions that bring out the absolute worst in people. Continue reading “The Majesty of Mindfulness”

How to Get Paid Up Front to Buy Stocks

submitted by jwithrow.stocks

Want to get paid up front to buy stocks you want to own at a price you specify? Selling put option contracts allows you to do just that.

Put options are a contractual agreement between two parties. The owner of the put option contract has the right to sell the designated stock to the counter-party at the agreed upon strike price at any time prior to the specified expiration date. In exchange for this right the owner of the put option must pay a market-based premium to the seller up front. Each contract is for 100 shares of the underlying stock.

For the owner, put options can serve two purposes – either as a downside hedge or as speculation. Generally speaking, the owner of the put option profits from the deal if the stock declines below the strike price.

In order to get paid up front to buy the stocks you want you simply need to “be the store” for hedgers and speculators and sell puts on stocks you would like to own. You choose the stock, the strike price, and the expiration date and you receive the premium immediately upon execution. That premium is yours to keep no matter what happens. If the stock is still above the strike price on expiration day then you walk away from the trade with pure profit. If the stock is below the strike price and the put option is exercised then you are obligated to buy 100 shares of the stock per option contract sold and the premium you were paid up front serves to reduce your cost basis in that position.

There are two basic strategies for selling put options. The first is to sell in-the-money puts on stocks you absolutely want to buy. This strategy can enable you to buy the stock at a lower price than it is trading for at the time.

Let’s use AUY as an example of this strategy (not a recommendation). AUY is currently trading at $4.48 per share. Instead of purchasing AUY at $4.48/share you could sell the February 20 5.5 Put for approximately $1.30 per share. This would obligate you to purchase 100 shares per put contract of AUY at $5.50 per share on or before February 20 and you would be paid $130 per contract up front to do so.

Now there are only two possible results. If AUY is trading above $5.50/share on February 20 then the put option expires worthless and you walk away with $130 per contract sold and you can explore selling more put options on AUY if you want. If AUY is still trading below $5.50/share on February 20 then you will be “put” the stock and you must purchase 100 shares per contract at $5.50/share. But you were already paid $1.30 per share so you would effectively be buying AUY at $4.20 per share ($5.50-1.30). Recall AUY was trading at $4.48 when you sold the put so you are buying the stock at a lower price than you could have originally.

The second strategy is to sell out-of-the-money puts on blue-chip stocks that you don’t think will dip below the strike price but you wouldn’t mind owning if they did. This is primarily a low-risk strategy for generating income and the lower premiums reflect this.

Let’s use WMT as an example of this strategy (not a recommendation). WMT is currently trading at $89.68 per share. We could sell the WMT March 20 82.5 Put for approximately $0.70 per share. In this example WMT would have to decline by roughly 8% in a little over two months for the put contract to be exercised. We walk away with $70 per contract unless that sharp decline happens.

As you can see, selling put options involves limited risk. You must keep enough cash in your brokerage account to purchase the underlying stock should the option be exercised but that is the most you can lose in each trade. If done properly, selling put options is actually less risky than buying stocks outright.

As always, be mindful of your asset allocation model before venturing into the equity markets.