VIDEO: How to Profit From Falling Stock Prices

One thing always leads to another.

I’m in the process of a do-it-yourself project to build a “home server”—a little black box that will hold 16 terabytes of videos, pictures, Word docs, etc.… all the digital detritus of my life that right now is spread across eight thumb drives, half-a-dozen portable hard drives, and the remains of too many laptops to remember.

And none of that is important except for the fact that while rummaging through some of those thumb drives last weekend, I came across an investment project I’d been working on about 13 years ago. And down the rabbit hole I went…

The idea I’d come up with at the time was this: I wanted to build an investment service for a previous employer that was structured around what are known as “call options,” an investment contract that gives the buyer of such options the right to buy shares of stock at a predetermined price in the future.

I saw you yawn!

Stick with me for a second. There’s money to be made here…

The idea I was testing back in the day was the viability of buying a stock that pays a high dividend, like Verizon or Pfizer, and immediately selling call options against those shares. It’s a derivation of what Wall Street knows as “selling covered calls.”

I won’t plunge us into the mechanics of how the strategy works because I know you just yawned again. All I will say is that I was testing the strategy to see if it would work as an investment newsletter, since timing issues are involved, and I wasn’t sure the publishing process at that time was quick enough to convey the trades in a timely manner.

The answer was no.

Which was a bummer, because the strategy, according to the spreadsheet I found on that drive, was performing really well.

Again, I won’t define “well” here because it would require that I explain the strategy and why it works, and that would just mean diving into a lot of yawn-inducing Wall Street language. Instead, I will tell you that the spreadsheet showed I was playing with real money in testing the strategy, and that it was impressively profitable with a limited amount of risk.

I share all of this because I am eager to bring options trading back to my work life.

I see huge opportunities to generate relatively safe income from fairly simple options strategies, and I think there’s room for that inside the Global Intelligence ecosystem.

To that end, I’ve been chatting recently with Guy Cohen. You’ve probably read some of Guy’s work in Field Notes, since he’s occasionally sharing his investment thoughts here.

Guy runs London-based WiseTraders, an options research and education platform, and he and I have been chatting in recent weeks about the financial markets and, in particular, using options to chase profits and/or income.

You can check out our full video chat on the subject right here:

I particularly like the income side of all this.

Though no one is supposed to know this, I am getting old(er). I just passed my 29th birthday (30 years ago) this past January, and I am much more intently focused on investment income these days than I am on chasing Wall Street’s next big thing. My “next big thing” investments are all focused on crypto and the blockchain.

When it comes to a traditional investment portfolio, I am much too leery of the stock market these days. If you’ve been reading Field Notes for more than a month or two, you’ll know I’m fearful of the abyss that the US economy and American society are racing toward.

That’s one of the primary reasons that, back in 2020, I ditched most of my stocks in the largest retirement account I own to refocus that portfolio on sleep-tight-at-night investments in Swiss francs and gold.

To be clear, in other portfolios I still own certain stocks with specific long-term tailwinds, such as Coinbase (the rise of crypto/blockchain), a handful of pharma/biopharma stocks (the rise of old people wanting to live longer and healthier), and a few high-dividend stocks I am particularly keen on in undervalued technology, the energy pipeline sector, and real estate investment trusts. These are stocks I’ve recommended to Global Intelligence readers, so I am eating my own cooking.

But options are a very different animal.

Where my stocks are purely aimed at capital gains and dividends over many years, options—the ones I care about—are aimed at short-term income plays with a limited amount of risk. I see them as a way to beef up the size of my portfolio as I continue to build toward retirement, and then as a way to generate extra income once I retire.

Guy and WiseTraders are helping me get back involved with options… and they can help you play these trades for potential income and profit, too.

In our video chat, Guy will introduce you to Chloe—who increased the size of her account 17 fold! She used exactly the sort of easy-to-follow strategies that Guy wants to show you, too.

Click here now to watch my full recent conversation with Guy.