UFPI - Earn A Potential 10% Plus Income With Monthly Options (February 2024)

2024-01-30 09:00:00 ET

Summary

• We explain why selling cash-covered puts and covered calls are relatively safe choices for earning a high income.
• We will discuss how to formulate a sustainable and repeatable options income strategy.
• In this monthly series, we present how to go about selecting the right kind of stocks for options income. We present two lists of 10 stocks with multiple scenarios: PUT options and deep-in-the-money CALL options.

Author's Note: This article is part of our periodic/monthly series that attempts to present two lists of stocks for the month that could be suitable for writing options to generate relatively safe income. Certain parts of the introduction, definitions, and section describing the selection process will have some commonality and repetitiveness with our previous articles in this series. This is unavoidable as well as intentional to keep the entire series consistent and easy to follow for new readers. Such sections are presented in 'italics.' Regular readers who follow the series from month to month could skip such sections.

Why This Monthly Options Series?

Earning a decent income from your investments significantly higher than the inflation rate is always challenging. This has been especially true in the past decade and a half. More recently, the interest rates have gone up, but in most cases, the fixed deposit rates are still lower than the inflation rate. Furthermore, interest rates are going to decline going forward. Investing in fundamentally strong dividend stocks is an excellent choice for building long-term wealth but not so much for the current income. We believe selling options (cash-covered puts and covered calls) remain a relatively good choice for earning a high current income. Obviously, there is some learning curve, and there are some risks involved with Options, and we do not recommend blindly jumping into the game. We will discuss how to mitigate the risks in a bit. Also, we will urge extra caution and due diligence....

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