Let me start by asking some questions: Do you have a stock you’ve been holding for months just waiting to break even? Do you generate less than 20% profit every month in your trading account? Are you tired of praying every time you open your portfolio statement? If you answered yes to any one of these three questions what I’m about to share with you could change your life forever.

Stock options are an investment vehicle originally designed to hedge, or insure a persons stock holdings. However the flexibility of options allows you to do a whole lot more than simply protect yourself against a loss. In this article I’m going to share with you one of the most popular strategies for trading options and 2 ways to actually improve it.

1.) The Covered Call - Renting Your Stock

Possibly the most popular options strategy in use by every day investors is the covered call. With this strategy a stock owner may sell someone else the right to their stock. If the stock remains low the original owner maintains ownership. This is an amazingly powerful way to create income on lazy stocks (stocks that just sit around and don’t go anywhere). Depending on exactly which option you sell you can generally create about 10-15% of your stock’s value every month you sell the option. If you manage to do that for 10 months, your original investment would pretty much be recouped and you would be sitting on a stock position with absolutely zero risk and nothing but pure profit (that’s how you get an infinite rate of return!).

2.) The Covered Call Improved - Subleasing a Stock

Okay, so it sounds nice enough that you could rent a stock you own, but what if you’re one of those people who don’t own any stock. Well fortunately we can twist this strategy just a bit to make that possible.

When you don’t own a house how do you get a place to live? You rent. If you don’t own a stock but you want to use it what can you do? Rent. You could rent a stock from somebody and now you are the rightful possessor for a limited time. During that time period you can do anything you want with that stock. So why not rent it? Or shall I say sub-lease it?

When you don’t actually own a stock you can still buy the rights to that stock and then turn around and sell someone rights against your rights. Just like renting and sub-leasing. The spread, or difference in price, is your profit. That profit can vary but if you do it right you should be able to generate at least a 20% profit each month - yea that’s right, I said each MONTH.

3.) The Calendar Call

Now I’m going to show you the most powerful way you can combine these strategies. The benefit of owning a stock is you have it right? It’s paid for, you can do whatever you want with it. Well what if you sign a long term rent agreement for that stock? That means you would have the right to own it for a long time. How long? Let’s be simple and say 2 years. Now that you have secured the future price of this stock you can rent it for the next 2 years - every month! As the value of the property (the stock your renting) goes up, your profits will go up in a huge way. In fact it’s so huge I can’t give you a percentage return that you could expect. Depending on how fast you break even, which could occur in a month, everything after that point is pure profit which ultimately becomes infinite.

I have given you an idea of three ways to make consistent monthly cash profits on your stock, and also on stock you don’t even own. Now I’m sure you are wondering where you can learn more about this. So why not start by downloading my free report, “How To Retire In One Year With Only $10,000”?

How to Learn More

If what you have just read makes sense to you and you’d like to learn more, the best place to start is Trade Smart University’s free workshop called the Foundations of Stocks and Options. You don't want to miss this free online workshop!

Jeremy Whaley is co-founder of Trade Smart University, an education company dedicated to helping everyday people learn to trade the stock market for consistent profits. If you would like to learn how to trade your own money for steady profits, visit www.TradeSmartU.com and experience affordable, accessible stock market education.