According the Chicago Mercantile Exchange (CME)—the world’s second-largest market for options and futures trading—about 75% of options contracts expire worthless.
This leads to the “dangerous” part of options trading most uninitiated investors fear.
A speculator who buys options has the chance to earn extraordinary returns. Fast gains of several hundred percent are not unusual… but only if the option buyer gets everything 100% right.
But remember… three out of four options contracts expire worthless…
Only master traders—with years of experience and rigid risk-management discipline—should speculate through options buying.
By selling options, traders put the overwhelming odds to work in their favor.
They lose the chance to make high-risk, triple-digit gains… but they gain the opportunity to earn consistent double-digit income yields.
And they do it on the backs of the safest, most powerful companies on the planet.
Here’s what Tom said about this “odds on” options approach:
From Tom Dyson, founder, Palm Beach Research Group: We’re going to find the best companies in the world… companies that make products that’ll never go out of fashion… companies that have the strongest brand names. They produce billions in extra cash every year and pay out huge dividends. They buy back tons of stock, have manageable debt levels, and have the best, most conservative management teams. They do business all over the world. These are companies like Coke, McDonald’s, Johnson & Johnson, and Intel. Normally, these companies aren’t cheap… everyone knows they’re the best. Just like beachfront property, they usually don’t come at a discount. So we’re going to make “low-ball” offers—sell put options—for these excellent companies. We’ll receive cash upfront in return, just for making the offer. That fee is our income. If one of our offers gets accepted… great. We’ll be buying companies like Intel and Coke at bargain-basement prices. This is very important. We’re making offers on companies at prices where we know it’ll be difficult to lose money. Imagine buying Coke 5-10% below its current price today. The beverage giant already has far more cash than it could possibly spend. And it produces billions more every year. Yet we’re going to offer to acquire it at a discount to today’s prices. If that happens, we’re lucky… we get Coke at a discount. And if we don’t, we get paid cash anyway. We get paid for our time… just for the offer to buy. Bottom line: Our pockets grow either way. We end up getting Coke at this ridiculously low price, where it’s almost impossible to lose money. Or we get cash for doing nothing but making an offer to buy one of the top companies on the planet. |
Tom’s strategy has paid enormous dividends in Palm Beach Income. His average trade yields a 14.8% annualized return. And Tom’s racked up a 96.2% overall win rate out of over 180 trades.
His subscribers closed out a recent trade on tech giant Apple for a 38% gain. A few months prior, an options trade on discount retailer Dollar General banked them a 48.5% annualized gain.
Now, these aren’t triple-digit gains… but they’re safe, profitable trades you can make over and over again. It amounts to serious “instant cash” income—when everyone else is making 0% (or less) in the bank.
If you’d like to learn more, Tom and Mark are hosting a special live options income webinar—tonight only. Click here to attend. (You’ll also get a free gift from Mark just for attending.)