Postcards: Dontrell Was At the Club Last Night... and He Was Cheating...

I am just trying to get to Maryland. Also, I'm shorting semiconductors and the Russell for the next 48 hours. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Dontrell Was At the Club Last Night... and He Was Cheating...]( I am just trying to get to Maryland. Also, I'm shorting semiconductors and the Russell for the next 48 hours. [Garrett {NAME}]( Mar 14   [READ IN APP](   Dear Fellow Expat: My flight from Fort Myers on Delta to Atlanta arrived 27 minutes early. But this article is about four hours late. They put us in the International Terminal because we were so early in Atlanta. There were flights to Ecuador and Mexico City around us. I was in Terminal F. My flight to Baltimore wasn’t listed on the video boards. So… I approached the courtesy desk. The woman working there put her index finger at me while taking a call. Then… me… her… and everyone flying to Europe found out that “Dontrell” had been cheating on her sister. Classic, Dontrell. Dontrell… my friend… you’re in trouble. This guy is probably the most hated man in Atlanta since Matt Ryan blew a 28-3 lead in the Super Bowl. I really, honestly appreciated all the emails today. I got to BWI in the early afternoon, and people were doing wellness checks with me because my Republic Risk letter didn’t go through at 10 am. An error on my end. But I’m humbled by your reading. The Poor Man… A few months ago, Porter Stansberry asked me a question… And I blanked on it. Let’s say that I traded his money. What would I do to make him money? I should have said to use Poor Man’s Covered Calls on stocks that he loves. You know… capital-efficient type.]( Instead, I rambled about leveraged ETFs, and he shook his head as if we’d just shared a car wash with the windows open. Let’s talk about how to trade… One of the best ways to generate income from your portfolio is to sell covered calls on your existing positions. That means for every 100 shares of a stock you own, selling a call option against those shares. If the stock's price rises above the strike price of the call option by the expiration date, you would sell your shares, keeping the initial premium and any gains you’ve made on the shares up to the strike price. However, while this is a great way to generate extra income, the capital required to purchase 100 shares of certain stocks is cost-prohibitive for some investors. Fortunately, there's a way you can produce similar results without the hefty upfront investment: the Poor Man’s Covered Call. How to Make Markets on a Budget The Poor Man's Covered Call employs a strategy that mimics the returns of a traditional covered call but requires a lot less capital. Rather than directly owning 100 shares, you would buy a long date call option (representing the right to buy 100 shares at a predetermined price) and sell a shorter-term call against it. This approach significantly reduces the initial capital required to make the same trade essentially. With this approach, you are paying for the right to own the stock at a later date while collecting a premium by selling the right to others in the short term. If the stock takes off, the option buyer gets to buy the stock while you collect your premium and the gains up to the accepted strike.  For instance, let’s say a stock is trading at $100. Instead of buying 100 shares for $10,000, you would buy a long call option with a strike price of $95, expiring in 120 days, for $15 per share. This brings your contract cost down dramatically to $1,500. You are saving $8500 in margin. You would then turn around and sell a shorter-dated call with a higher strike price of $105 for $5 per share, receiving $500. This strategy lowers your initial investment to $1,000 after accounting for the premium received from selling the call. Here’s How It's Done Now, let's apply this strategy to Wynn Resorts (WYNN). The stock broke above its 20-day moving average and is showing positive momentum in our key indicators, the Relative Strength Index (RSI), Money Flow Index (MFI), Moving Average Convergence Divergence (MACD), and the Average Directional Index (ADX), which shows that things are moving in the right direction. There are numerous ways to trade WYNN. Consider buying the stock outright with a tight stop of 2% or looking at a debit spread to ride the stock's momentum. However, to mimic the benefits of a covered call at a significantly cheaper cost up front, the Poor Man's Covered Call is our best solution. First, you buy a longer-dated call option with a strike price of $95 and an expiration date of July 19th at a cost of $14.53 per share. This gives you the right to buy 100 shares of WYNN for $1,453. Remember, to buy 100 shares outright would cost us $10,418, as the stock currently trades at $104.18. This option gives you control over the 100 shares at $95 per share, below the current price, without the need to come out of pocket over $10,000. Next, you sell a call with a strike price of $110 expiring on June 21st, for which you receive a premium of $4.95 per share. This step pays a credit of $495 generating income immediately and helps us lock in profit up front. Let’s examine a few potential outcomes: - If WYNN remains below $110 by the expiration, you keep the premium and have the opportunity to sell another call against your long position. - If WYNN stays under $110, your profit is the premium collected. If it rises above $110, your gains on the stock are capped, but you're still able to buy the shares at $95 (thanks to your long call) and sell them at $110, picking up the $15 profit. In this specific scenario with WYNN, your net out of pocket is the cost of the long call ($1,453) minus the premium from the short call ($495), resulting in a total cost of $958. This gives you a lower barrier to entry compared to buying the stock directly and leverages the upside potential of WYNN while providing a degree of protection against downside risk by taking your gains up front. This is a conservative strategy to mimic the benefits of a covered call with a reduced capital requirement If you’re a member of Republic Risk Letter, you can’t go wrong using this strategy on our Model Portfolio. Sign up… or don’t and be mad you didn’t sign up…. [Upgrade to paid]( Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()