Artist Who Sell Covered Calls Earn Large Monthly Residual Income

 Yes. you can be wealthy and live your artist dreams. 

Give me a moment of your time and I'll I teach the same thing I teach creative and performing artists who seek financial freedom.

Selling call options on stocks you buy is a fast and reliable way of generating income on a monthly basis. It works like this:  

Let’s say you bought a stock on Monday at $9.75. That stock is now in your possession and you now own it. If you wanted to sell it the next day you are free to do so. If you wanted to hold that same stock for three years you are free to do so.  However, if you wanted to generate income from that $9.75 stock you are free to do so.

 Fast forward to the next day, Tuesday, and you’ve decided you want to sell the stock you purchased on Monday when it reaches $10.  Rather than selling the stock immediately, you could sell a call option.  

Selling a call option means that you would be selling the right, not the obligation, to someone in the market place to buy that stock away from you at the $10 price at a later date.  The buyer of the option would then pay you something called a premium. In this example our premium is $.90 per share.  The price that you’ve agreed to sell the stock at is called the strike price. In this case it’s $10.

So in the above example you sold a call option and earned a $.90 per share premium. Simultaneously, you agreed to sell the stock at the $10

Strike price.  

No matter what happens in this transaction, if the buyer decides to buy the stock from you or let the option expire, you get to keep the $.90 premium.  

The buyer of the option could choose to exercise that option at any time before the expiration date and pay you the full $10. If the buyer decides to

exercise the option, you would be obligated to sell the stock to him or her at the $10 strike price but you would keep the $.90 premium.  

 Let’s look at the total profit.  

Stock bought at $9.75 sold at $10 = .25 per share profit or 2.5% return

Plus .90 premium.                         = .90 per share profit or 10%

 Total profit on trade                       = 12.5% per month

  WOW That's Great !

 

Entertainment Industry Option Equivalent

 OK, If you really want to understand how stock market options work, we can  take a look at the entertainment industry equivalent.

 Let’s say you wrote a film script. You send your script to a well known Hollywood production company. Your script gets read by the top executive. She loves it. However, she’s not one hundred percent certain she can sell your script to a major motion picture studio for production. What’s her solution? An option. 

The Hollywood production company is willing to option your script from you for $50,000. The option expires in six months.  You still own the product and copyright.  If your script gets picked up by a studio, you’ve agreed in advance to sell it to the production company for $250,000.

 In the right option scenario, everybody wins.

 In the above example, if your script gets selected by Warner Bros. for production, you earn an additional $250,000. Whether  your script gets sold or not, you get to keep the initial $50,000.  

If your script gets sold, your profit on the deal is $50,000 plus $250,000 for a total profit of $300,000. In the stock market this kind of transaction happens over one million times each day.   

If you understand the entertainment industry option equivalent, you can earn thousands of dollars per month in residual income.

 

Stock Option Rules 

1)    The stock you purchase must be optionable.

2)    You must buy stocks in one hundred share increments referred to on Wall Street as a contract.

3)    You must enjoy earning large amounts of money on a monthly basis.

 

Cash Flow Example

 If you practiced and sold calls on a monthly basis, you could generate a 10% monthly return or more. That means……. 

$5,000 could return           $ 500 per month less commission

$7,500 could generate      $ 750 per month less commission

$10,000 could generate   $1,000 per month minus broker commission

 

Taken to a higher level

 $50,000 could return        $5,000 per month

$100,000 could return     $10,000 per month

$500,000 could return   $50,000 per month

 

So what's the moral of the story? Yes, you can be wealthy and be an artist at the same time. The key is getting a financial education.  Sign up for our free newsletter and learn how you can join The Wealthy Artist Millionaires Club.