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How to Get an Income From a Stock
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Kurt Leigh
Jul 6, 2009, 8:22:06 AM7/6/09
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One strategy to making money from the stock market is simply to buy a
few good stocks and work on creating an income from those stocks.
There are 4 ways to create an income from a stock that you already
own.
1. Dividends
Some companies pay dividends which is a small portion of the company's
earnings. These dividends are proportional to what percentage of the
company you own. Many people consider this to be the best and only way
to generate an income from a stock and simply stop there.
2. Covered Calls
When you sell a covered call you are selling someone else the right to
buy the stock from you at a certain price at or before a given time
frame. For this right you receive a premium. The only downside from
this strategy is that if the stock does rise to the level you sold the
call at before expiration you risk getting called out of the stock at
that price, otherwise the option expires worthless.
3. Appreciation
The simplest way to make money from a stock is simply getting it
through appreciation. If the stock goes up 20% and you sell it you
have made money. So make sure to do your research and only buy
worthwhile companies.
4. Selling Puts
You can also sell puts to enter the trade. This is a great strategy
that is often overlooked and deemed risky. Selling a put to enter a
stock is a way to get paid to have the obligation to buy the stock at
or before a given date. If you only sell puts on stocks that you can
afford to buy I don't see it as a bad thing. It is a way to start
making money from a trade even before you get into it.
few good stocks and work on creating an income from those stocks.
There are 4 ways to create an income from a stock that you already
own.
1. Dividends
Some companies pay dividends which is a small portion of the company's
earnings. These dividends are proportional to what percentage of the
company you own. Many people consider this to be the best and only way
to generate an income from a stock and simply stop there.
2. Covered Calls
When you sell a covered call you are selling someone else the right to
buy the stock from you at a certain price at or before a given time
frame. For this right you receive a premium. The only downside from
this strategy is that if the stock does rise to the level you sold the
call at before expiration you risk getting called out of the stock at
that price, otherwise the option expires worthless.
3. Appreciation
The simplest way to make money from a stock is simply getting it
through appreciation. If the stock goes up 20% and you sell it you
have made money. So make sure to do your research and only buy
worthwhile companies.
4. Selling Puts
You can also sell puts to enter the trade. This is a great strategy
that is often overlooked and deemed risky. Selling a put to enter a
stock is a way to get paid to have the obligation to buy the stock at
or before a given date. If you only sell puts on stocks that you can
afford to buy I don't see it as a bad thing. It is a way to start
making money from a trade even before you get into it.
Stock Market Index Secret Trading Method:http://www.stgetview.tk/
vjp...@at.biostrategist.dot.dot.com
Jul 6, 2009, 11:10:44 AM7/6/09
to
The stock market is by definition, volatile.
However genuine appreciation is long term,
wich never serves the brokers in terms of commissions they seek.
We need to change the way brokers are paid.
They need to have long term skin in the game.
- = -
Vasos Panagiotopoulos, Columbia'81+, Reagan, Mozart, Pindus, BioStrategist
http://www.facebook.com/vasjpan2
---{Nothing herein constitutes advice. Everything fully disclaimed.}---
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