The Prisoner-of-War's Secret to Outsized Gains

We're turning to Retirement Millionaire editor Dr. David "Doc" Eifrig for today's Masters Series essay – adapted from the April 18, 2022 issue of our free DailyWealth e-letter. In it, he details how this strategy can help you earn massive gains while giving your portfolio extra protection from today's uncertain market... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Master Series] Editor's note: [Many investors have misconceptions about trading options](... But if used correctly, they can actually be less risky than buying stocks outright. That's why we're turning to Retirement Millionaire editor Dr. David "Doc" Eifrig for today's Masters Series essay – adapted from the April 18, 2022 issue of our free DailyWealth e-letter. In it, he details how this strategy can help you earn massive gains while giving your portfolio extra protection from today's uncertain market... --------------------------------------------------------------- The Prisoner-of-War's Secret to Outsized Gains By Dr. David Eifrig, editor, Retirement Millionaire Even if they didn't smoke, the prisoners should have held onto those cigarettes... It was 1942. The British soldiers had been captured in Libya, then shipped off to an Italian transit camp as prisoners of war ("POWs"). When the POWs got their first weekly Red Cross food deliveries, they immediately began swapping items. Everyone wanted to trade some of their rations for someone else's... but no one had established their true value. For example, if a soldier didn't smoke, he was happy to give up his cigarettes for a bit more food. And the Sikh prisoners – whose faith promotes vegetarian diets – were eager to accept anything in exchange for their tins of beef. Before long, each soldier had a better idea of what everything in his Red Cross box was worth. But the system wasn't perfect – which meant some folks could come out with better bargains... It's one of the deepest truths about markets... Uncertainty leads to disagreement, and disagreement leads to varied prices. If you know what you're looking for, that gives you an opportunity to make outsized gains. We'll see how this is playing out today... One of the prisoners from back then, R.A. Radford – who studied economics before enlisting in the British Army – described their dynamic in his 1945 paper, "The Economic Organisation of a P.O.W. Camp." Within a week or two, trade grew, rough scales of exchange values came into existence... It was realized that a tin of jam was worth one-half pound of margarine plus something else; that a cigarette issue was worth several chocolate issues, and a tin of diced carrots was worth practically nothing. By the time Radford settled into a permanent POW camp in Germany, the values were so firmly established that the prisoners posted signs with each item's going rate. Cigarettes were the currency. A stable, predictable market ensures that each participant gets a fair deal. But experienced investors see their biggest gains in times of chaos. Radford gave this example... Stories circulated of a padre who started off round the camp with a tin of cheese and five cigarettes and returned to his bed with a complete parcel in addition to his original cheese and cigarettes. The priest exploited uncertainty in the POW camp. And if you're looking for uncertainty, look no further than the world today... Investors don't know what's going to happen with the war between Russia and Ukraine... They don't know what's going to happen with inflation... And they don't know what the government will do about it. In response, investors are clamoring to buy one particular thing right now. And you can make a lot of money selling it to them. Specifically, I'm talking about selling put options. Just like the first days in a POW camp, we can see that current prices aren't where they are supposed to be... and that means there's a tremendous opportunity to make money. Let me be clear: This strategy is not taking advantage of anyone. We are going to give them exactly what they want... and at the price they want. And we will end up richer because of it. Let me show you how... --------------------------------------------------------------- Recommended Link: [Can Kevin Kisner Collect $4,000 in 60 Seconds?]( This morning, we aired a Real Money Demo. A professional athlete attempted to collect $4,000 in 60 seconds by selling put options. Did he succeed... or lose money? [Watch his transaction on Costco Wholesale (COST) and find out – including how to begin using this strategy yourself](. --------------------------------------------------------------- At any time, hundreds of thousands of options are available to sell. With such a vast market, you can always find a deal somewhere. You can understand options in a lot of different ways. I find it particularly helpful to think about them as insurance or portfolio protection... When you buy home insurance, you're paying for protection against loss of value to your home. You pay money to the insurance company each and every year. Most years, the house doesn't burn down. Most likely, it never will. The customer is happy to pay for peace of mind, and the insurance company is happy to earn healthy profits. But how much does the insurance cost each year? That depends on the likelihood of a fire... If you have a home in a safe area, it may cost $500 per year. If there's an arsonist school nearby, maybe rates will double to $1,000. And if you build it near the base of an active volcano, maybe the rate jumps to $5,000. The difference is risk. The insurance company is raising its rates to protect its bottom line. And the customer is willing to pay more because he wants additional protection against a potential disaster. Today, investors want extra protection amid heightened economic uncertainty. That can lead to surges in income for option sellers. One index essentially measures the price of this insurance. It's called the CBOE Volatility Index ("VIX"). The VIX takes the price of options and works backward to see how volatile option buyers think stocks will be in the future (what's called "implied volatility"). For the majority of the last 10 years, the VIX – or the expected volatility of the market – was roughly 15, sometimes getting as low as 9. During the worst of the pandemic, expected volatility surged to more than 80. But even today, with uncertainty clouding the markets, it still hovers around 16. Take a look... You can also see how frequently the VIX goes through sudden spikes in volatility. So, just how much more money can we make? Let's say you wanted to sell insurance on a stock like Target (TGT). Target is a well-known retail giant with a history of strong returns and growing dividends. Even though Target is a stock most of us would love to own at today's prices (it's down roughly 11% in 2023), there are still nervous investors who want to buy insurance in case it falls more. In a normal market, like September of 2021, an option seller could make $340 by selling Target insurance. Not bad. But today, because of the fear in the market, the price of that insurance has shot up to $910. So that's a 168% increase for a nearly identical put option... The only thing that has changed is the level of fear in the market. You can make hundreds, even thousands, in extra income per month by selling options. I truly believe there has never been a better time to learn how to do so... Here's to our health, wealth, and a great retirement, Dr. David Eifrig --------------------------------------------------------------- Editor's note: Doc first developed his option-selling technique at Goldman Sachs... He has shown thousands of people from all walks of life how to use this strategy. Now, he's stepping forward to teach someone with no previous options experience how to use it... Doc recently hosted a "Real Money Demo" with a PGA Tour golf pro to teach him how to use this strategy to instantly collect thousands of dollars in income. [Click here to watch the full replay](... --------------------------------------------------------------- Recommended Link: [The Credit Crisis Is Here... NOW Is the Time to Profit]( Top experts are calling it: A major crisis is now underway. It's something far bigger and more important than what happens to the Nasdaq or the S&P 500. The world's best investors are ready to pounce, and so are a tiny handful of subscribers who know the secret to cashing in. That's because this crash will create a slew of 100%-plus opportunities... backed by legal protections that stocks can only dream of. It's finally happening. [So it's critical that you get the full story here right away](. --------------------------------------------------------------- You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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