Finance: A Triple Dipper: How to Make 3 Profits on 1 Stock Trade

A Triple Dipper: How to Make 3 Profits on 1 Stock Trade

Written by Floyd Snyder

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Seems pretty easy doesn’t it? Well it is, when it works. But like everything in repparttar stock market (or in life itself for that matter) there is no sure thing.

Any number of things can happen. Here are just a couple of things you have to consider. First off, I would check to see what all repparttar 112085 analysts are saying about any stock you are about to try this on. Make sure repparttar 112086 company has a solid dividend history. I would also caution against making repparttar 112087 play on a stock that is due to report earnings while you are in repparttar 112088 options period. Also keep in mind that as a general rule a stock will dip in direct relationship to repparttar 112089 divided paid. Obviously this strategy is not always going to play out as our hypothetical trade did. However, I have had results similar to that as well as some much better, and "yes" some that did not work at all. What makes repparttar 112090 play less risky than repparttar 112091 stand alone buy and hold trade is that no matter what repparttar 112092 stock does, you get repparttar 112093 dividend and repparttar 112094 options premium money giving you that much downside protection on a move against you.

I had a number of stocks that I would hold in my account and merely roll over repparttar 112095 option money and collect repparttar 112096 dividend on a regular bases, double-dippers, and was very happy not to have repparttar 112097 stock called away.

I was very fortunate that I had met a broker who became one of my best friends and taught me this method of investing. I strongly suggest that you seek repparttar 112098 advice of a professional broker; money manager; your attorney; your accountant; your present, past or future wife or husband; your doctor; your heirs, your auto mechanic or anyone else in repparttar 112099 world that you can think of before you try this or any method of investing. (Okay, I think that covers about everyone.)

To learn more about Covered Call writing, check repparttar 112100 resources at http://www.TraderAide.com. Good luck and happy trading!

No permission is needed to reproduce an unedited copy of this article as long repparttar 112101 About The Author tag is left in tact and hot links included. We do request that we be informed of where it is posted so reciprocal links can be considered. Email floyd@sbmag.org.

Floyd Snyder has been trading and investing in the stock market for three decades. He was on the forefront of the day trading craze that swept the nation back in the late1990's both as a trader and as the moderator of one of the Internet's largest real time trading rooms. He is the owner of http://www.TraderAide.com , Strictly Business Magazine at http://www.sbmag.org www.FrameHouseGallery.com and www.EducationResourcesNetwork.com

INVEST, BE WRONG, AND MAKE MONEY IN THE STOCK MARKET

Written by AL THOMAS

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small and let your profits run. How many times have you heard that one? BUT how many times have you ignored that rule? At repparttar

end of

year when you analyze your trades you find that you made $3.00 for each $1.00 you lost you will show a nice big profit. I don’t care what business you are in you don’t put your whole wad on a single outcome and stick with it until it either works or go broke. That is what brokers and mutual fund managers want you to do. They want you to buy, but never sell. It is a tragedy for repparttar 112085

small investor today that mutual fund families are putting in selling restrictions to discourage investors from dumping funds that are headed down. Many require long holding periods and if you sell prior to that time they charge an extra fee of 2%. They give lame excuses that I know are not true for doing this. Never buy any fund or trade with any brokerage company that has that kind of rule. It is cheaper to pay repparttar 112086

2% or whatever fee there is and get out than hang around and lose 20% to 40% of your equity. Look back at 2000 to 2003. This can happen again despite what your broker tells you. Be wrong and run home with most of your money. You still have enough to invest in a better opportunity. If you are disciplined to get out of any bad situation early you will end up a rich person.

Investment Letter 3-month free trial. Click www.mutualfundmagic.com Author of best seller "IF IT DOESN'T GO UP,DON'T BUY IT!" Never lose money in the market. Copyright 2004 Albert W. Thomas All rights reserved.Former 17-year exchange member,floor trader and brokerage company owner.

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