A straightforward guide to generating consistent income by selling call options on selected stocks
The Stock Option Income Generator outlines a low-stress approach to making predictable profits no matter what the state of the overall market. Harvey Friedentag, a registered investment advisor who has been successfully using this strategy for more than thirty-six years, shows how to pick stocks and then sell call options against those stocks to generate a constant source of income. With this book, you'll quickly learn to
- Make consistent profits in the stock market and increase your gains
- Protect stock holdings from price declines, cutting your losses
- Profit from big market moves as well as sideways moves
- Receive a controllable tax shelter from an option income portfolio
- Buy more stocks for less money
Friedentag's strategy is ideal for anyone who wants to generate better returns than the overall market averages, with less risk, and receive the benefits of tax-advantaged investing.
Chapter 1 Fear and Ignorance.
The Stock Market Crash of 1929.
Investment Knowledge + Stock Market = Profits.
Understanding Investor Behavior.
The Crash of 2008.
What To Do First.
My First Stock Purchase.
Self Management a Better Way.
Chapter 2 Invest with Confidence.
What Is Investing?
Risk versus Reward: Finding Your Balance
The Three Strategic Factors.
Stocks: The Long-Term Core.
Defining “Investing” and “Fear”.
Market Madness: Black Monday October 19, 1987.
Market Anxiety Is Caused by Many Factors.
Year 2008: The Collapse of the Stock Market.
Investment Policy Statement.
Discipline Can Be Really Good for You.
Chapter 3 An Overview of How to Invest.
Investing in Stocks.
Growth Stock Investing.
Common Sense Stock Selection.
Dividend Income Stock Investing.
Keep in Mind.
Chapter 4 Stock Picking, Research and Annual Reports.
Questions for Investment Decisions.
Sources of Investment Information.
Reading the Annual Report.
The Quarterly Report.
Changing the Rules.
Stock Selection Summary.
Chapter 5 How to Read the Financial News.
Guide to the Economy and the Stock Market.
Your Wallet Can Be a Leading Economic Indicator.
Chapter 6 The Art of Investing, Risk and Reward.
Stocks or Bonds.
Anytime Is a Good Time to Start an Investment Portfolio.
Avoid Common Investment Risks.
Risk Breeds Fear.
General Investment Strategies.
The Tools of Contrarian Investing.
Classic Stock Market Statements.
Madness of Crowds.
The Madness Continues.
Take Advantage of the Pros.
Insider Trading Is Not Always Illegal.
Buy, Sell or Hold.
Transaction Costs Compared.
To Make Money in the Stock Market Don't Lose Any.
Chapter 7 Dividend Reinvestment Plans.
Dividend Reinvesting Plans and Dollar Cost Averaging.
The Compounding Effect.
DRPs: Advantages for the Investor.
DRPs: Advantages for the Companies.
Using DRPs to Select Stocks.
Safety with a Small Investment.
Dividend Reinvestment Plans and the "Compounding" Effect.
The Dividend Debate.
Chapter 8 Picking and Dealing with a Stockbroker.
We Invest to Make Money.
The Buck Starts Here.
Shocking Facts: Is Research from Wall Street Useless, or Worse?
The Stocks in the Dow Jones Averages.
Today's Bargains Can Be Tomorrow's Winners and Today's Winners Can Be Tomorrow's Losers.
Why Use a Discount Broker?
Chapter 9 Advanced Investing and Goal Setting.
Money x Return x Time = Your Goal.
Risk Reward Relationship.
Chapter 10 Building Your Portfolio.
How the Pros Choose Stocks.
Benjamin Graham the Value Investor.
How Other Professionals Invest.
Value vs. Stock Price.
Buying and Selling Stocks.
Use Market Orders Only When You Absolutely Want a Transaction Completed.
Portfolio Management Guidelines.
A Reliable Way to Invest.
Chapter 11 Basic Investment Guidelines.
The Realities of Investing: Mind Over Matter.
Do Not Try to Predict the Market.
Capitalize on Stock Market Anxiety and Euphoria.
Remember, No One Becomes Poor Taking a Profit.
Chapter 12 Options and the Stock Market.
What Is an Option?
The Business of Options.
Options Share Many Similarities with Common Stocks.
History of Options.
Function of Options.
Factors Affecting Option Valuation.
The Stock's Current Price and the Strike Price.
The Option Premium.
The Option Strategy.
What Is a Covered Call Option?
What Is a Covered Writer?
Some Questions and Answers.
Why Sellers Sell Calls: Some Strategies.
Using Options and Margin.
What Is Margin?
Avoid the Premium Trap.
Selling Options: Prudent Investing Method.
Chapter 13 Options and Potential Returns.
Naked Option Writing.
Starting a Covered Call Program.
The Pricing of Options.
Determining the Best Time-Value.
Determining the Best Strike Price.
Determining the Best Underlying Stock.
When to Take Action.
Understanding Published Option Premiums.
The Standard Method of Using Options.
My Method of Using Options.
Chapter 14 Margin: The Credit You Can Use.
Advantages of Margin.
The Margin Account and Buying Power.
The Margin Account Maintenance.
Important Margin Principles.
Opening a Margin Account.
Basic Ideas and Terminology.
Margin or Maintenance Call.
Converting Dividends into Capital Gains.
Using Margin for Personal Purchases.
Chapter 15 Managing an Option Income Portfolio.
The Writing Possibilities.
Option Selection for Option Writing.
Selling Time Value.
Selling a Covered Call Option
Buy and Write Strategy (Buy/Write).
Formula for Stock and Option Selection.
The Option Buyer.
The Proof an Option Income Portfolio Is a Winner.
Periodical Review of Portfolio Equity Holdings.
Option Income Portfolio Review
Chapter 16 Option Income Portfolio as a Tax Shelter.
The Option Income Portfolio and Taxes.
Option Contract Closing Transaction.
Tax Gains or Losses.
Capital Loss or Gain Bank.
Chapter 17 Options: Standard Operating Procedures.
Rule of Thumb.
No Time = No Time Value.
Stock Price Goes Down.
Stock Price Stays the Same.
Stock Price Goes Up.
Selling and Buying Back Calls, One Stock for One Year.
Option Income Portfolio Procedure.
Chapter 18 LEAPS.
LEAPS Options for a Longer Term.
Chapter 19 Conclusions.
Fear, Greed, Gope, and One's Self.
Traits of the Winner.
Traits of the Loser.
The Surprising New Shape of the Economy.
Madness of Crowds Returns.
The Good News.
Remember Time Plus Money for Successful Investing.
Appendix: Investing in Citigroup Through the Years.
About The Author.