Why Buying Cheerios Can Make You a "Poor Man”

[] Poor man’s covered calls are a great way to use margin and replicate returns that you might obtain with ordinary stock. Take control of your leverage trades and look for incredible returns. [View in browser]( . Poor man’s covered calls are a great way to use margin and replicate returns that you might obtain with ordinary stock. Take control of your leverage trades and look for incredible returns. [View in browser]( . . [] [Havens Investment Letter] [] [Havens Investment Letter] [] [] [] Reclusive Genius Uncovers the "Perfect AAPL Trade" With years of trading experience and a proprietary system for backtesting trading results, one reclusive genius has discovered the "perfect" way to trade AAPL -- the biggest and richest tech stock in the world! [Learn how he does it here]( [] --------------------------------------------------------------- [] Reclusive Genius Uncovers the "Perfect AAPL Trade" With years of trading experience and a proprietary system for backtesting trading results, one reclusive genius has discovered the "perfect" way to trade AAPL -- the biggest and richest tech stock in the world! [Learn how he does it here]( [] --------------------------------------------------------------- [] [] Buying Cheerios Can Make You a “Poor Man”? [Garrett Pic] Dear Investor, Market momentum is Red. It might not feel like it after today’s rally, but pay close attention to volume ahead of this earnings season. We’re coming off another long holiday weekend, and investors need to assess the conditions ahead of next week. In addition, we have earnings AND CPI data ahead of the Fed’s next meeting. Expect some wild swings, and be conservative. Okay, It’s time to talk about General Mills (GIS). The cereal manufacturer - behind brands like Honey Nut Cheerios and regular old Cheerios - has consistently bounced to new 52-week highs. Despite concerns about inflation, packaging, and high production costs, GIS keeps increasing. The moves for GIS come as most of the market trades under its 50-day moving average. The general rule of momentum is that stronger stocks tend to move higher… While weaker stocks tend to move lower over time. Right now, buying 100 shares of GIS would cost roughly $7,560. That seems like a trade for a rich man. But what about buying GIS and trading it like a “poor man?” In The Money One of the great ways to trade stock like GIS is to use the leverage of options. Rather than speculating on calls that are trading at a higher strike price than today’s price of $75.51. You can purchase an “In the Money” Call for the stock. The In-the-Money (ITM) trade consists of buying the right to purchase a stock at a price lower than today’s levels on or before a specific date. For this example, we’ll use the GIS $72.50 call for July 15, 2022, which is $3.25 per contract. The breakeven price for this contract by NEXT Friday would be $75.75. That means we have roughly 15 cents of time baked into this contract. You are buying IN the money. If you only buy the contract, you need the stock to move above that breakeven level to make any money by next Friday. And according to Options Profit Calculator, the odds of this are $45.1%. Not bad. Plus, you’ve defined your risk by knowing that you have the right, but not the obligation, to buy 100 shares at $72.50 on or before next week. But it’s not the greatest odds either. If it goes higher, I could buy the stock and have a 50-50 shot of making money. So, what if you do something called a Poor Man’s Covered Call? Making Money The Poor Way A traditional covered call consists of an investor owning 100 shares of a company’s stock and then selling a call at a strike price out of the money. For example, you might own 100 shares of GIS. If you sell the $77.50 call for next Friday, you’d only receive $0.25 per share or $25.00 total. That is on top of roughly $7,561 on the existing stock that you own. That’s not much of a return, is it? To put up that sort of money for $25 is silly. But what if you own the In-the-Money and then sell the $77.50 call for $25. You can write this call, and you end up defining your risk at $300 because the spread is ($325 minus $25). You now have more than a 50% chance to make money (remember the stock is 50% always) You also define your upside on this at $77.75 by next Friday, and your breakeven at roughly $75.50. You effectively put up a margin of $300 for this momentum stock to continue climbing, and your maximum return is $200. So, what sounds better? Using just $300 for an upside of $200… Or having to put up $7,551 for a shot at $224? The answer is the former. Trade like a poor man. Enjoy your day, [Garrett Sig] Garrett {NAME} Chief Analyst, American Markets [] --------------------------------------------------------------- [] [] Buying Cheerios Can Make You a “Poor Man”? [Garrett Pic] Dear Investor, Market momentum is Red. It might not feel like it after today’s rally, but pay close attention to volume ahead of this earnings season. We’re coming off another long holiday weekend, and investors need to assess the conditions ahead of next week. In addition, we have earnings AND CPI data ahead of the Fed’s next meeting. Expect some wild swings, and be conservative. Okay, It’s time to talk about General Mills (GIS). The cereal manufacturer - behind brands like Honey Nut Cheerios and regular old Cheerios - has consistently bounced to new 52-week highs. Despite concerns about inflation, packaging, and high production costs, GIS keeps increasing. The moves for GIS come as most of the market trades under its 50-day moving average. The general rule of momentum is that stronger stocks tend to move higher… While weaker stocks tend to move lower over time. Right now, buying 100 shares of GIS would cost roughly $7,560. That seems like a trade for a rich man. But what about buying GIS and trading it like a “poor man?” In The Money One of the great ways to trade stock like GIS is to use the leverage of options. Rather than speculating on calls that are trading at a higher strike price than today’s price of $75.51. You can purchase an “In the Money” Call for the stock. The In-the-Money (ITM) trade consists of buying the right to purchase a stock at a price lower than today’s levels on or before a specific date. For this example, we’ll use the GIS $72.50 call for July 15, 2022, which is $3.25 per contract. The breakeven price for this contract by NEXT Friday would be $75.75. That means we have roughly 15 cents of time baked into this contract. You are buying IN the money. If you only buy the contract, you need the stock to move above that breakeven level to make any money by next Friday. And according to Options Profit Calculator, the odds of this are $45.1%. Not bad. Plus, you’ve defined your risk by knowing that you have the right, but not the obligation, to buy 100 shares at $72.50 on or before next week. But it’s not the greatest odds either. If it goes higher, I could buy the stock and have a 50-50 shot of making money. So, what if you do something called a Poor Man’s Covered Call? Making Money The Poor Way A traditional covered call consists of an investor owning 100 shares of a company’s stock and then selling a call at a strike price out of the money. For example, you might own 100 shares of GIS. If you sell the $77.50 call for next Friday, you’d only receive $0.25 per share or $25.00 total. That is on top of roughly $7,561 on the existing stock that you own. That’s not much of a return, is it? To put up that sort of money for $25 is silly. But what if you own the In-the-Money and then sell the $77.50 call for $25. You can write this call, and you end up defining your risk at $300 because the spread is ($325 minus $25). You now have more than a 50% chance to make money (remember the stock is 50% always) You also define your upside on this at $77.75 by next Friday, and your breakeven at roughly $75.50. You effectively put up a margin of $300 for this momentum stock to continue climbing, and your maximum return is $200. So, what sounds better? Using just $300 for an upside of $200… Or having to put up $7,551 for a shot at $224? The answer is the former. Trade like a poor man. Enjoy your day, [Garrett Sig] Garrett {NAME} Chief Analyst, American Markets --------------------------------------------------------------- [] California's Greatest AAPL Creation Isn't in Silicon Valley... [California coastline]( [Meet the Tech Wiz Behind the Perfect Apple Trade]( --------------------------------------------------------------- [] [] California's Greatest AAPL Creation Isn't in Silicon Valley... [California coastline]( [Meet the Tech Wiz Behind the Perfect Apple Trade]( --------------------------------------------------------------- [] [] [] 20-Year CBOE Vet Reveals: “This is My Answer to Volatility” Alan Knuckman is a CBOE veteran who has made millions trading the market, appearing regularly on every major financial network in the company. But today—after 3 years of research—and billions of data points analyzed… He’s revealing one of the biggest breakthroughs of his career! It’s a research project that helps solve the scariest issue for most traders… [Click here to learn Alan’s solution for volatility]( --------------------------------------------------------------- [] [] [] 20-Year CBOE Vet Reveals: “This is My Answer to Volatility” Alan Knuckman is a CBOE veteran who has made millions trading the market, appearing regularly on every major financial network in the company. But today—after 3 years of research—and billions of data points analyzed… He’s revealing one of the biggest breakthroughs of his career! It’s a research project that helps solve the scariest issue for most traders… [Click here to learn Alan’s solution for volatility]( --------------------------------------------------------------- [] [] Article Recap - [Buying Cheerios Can Make You a “Poor Man”?](#i572731) - [0-Year CBOE Vet Reveals: “This is My Answer to Volatility”](#159895) --------------------------------------------------------------- [] Article Recap - [Buying Cheerios Can Make You a “Poor Man”?](#i572731) - [0-Year CBOE Vet Reveals: “This is My Answer to Volatility”](#159895) --------------------------------------------------------------- [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information, please visit [our disclaimer page here.]( Sent to: {EMAIL} [Unsubscribe]( Godesburg Financial Publishing Inc., 251 Little Falls Drive, Wilmington, DE 19808, United States [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information, please visit [our disclaimer page here.]( Sent to: {EMAIL} [Unsubscribe]( Godesburg Financial Publishing Inc., 251 Little Falls Drive, Wilmington, DE 19808, United States