How to generate income from your stocks portfolio

Do you own stocks? If you investing for a long term instead of just holding your stocks portfolio and hoping your portfolio will go up in value over time, why not make your stocks portfolio to generate income for you.

Instructions

Difficulty: Moderate

1. You can generate income from company dividends that they pay periodically.
2. Beware of dividends trap, which mean that the company is losing money but pay you a big dividend.
3. Sell cover call option with equal or higher strike price than the stocks purchased price.
4. When you sell cover call, someone else will pay you premium and it doesn't matter what direction your stock goes you entitled to keep the premium.
5. If your short cover call out of the money at expiration it will expire worthless, so you don't have to buy it back.
   If your short cover call in the money at expiration then your stock will get assigned or you can close your short position before expiration by buying it back.
6. You can also collect premium by selling put option.
   Sell put options only with the strike price that you willing to pay for the stock.
7. It work almost like putting limit order to purchase the stock, make sure you have enough capital to cover it, just in case your short put expire in the money then you will be obligated to purchase stock at strike price.
8. To learn more about this strategy talk to your financial advisor or broker. If you have online account with online brokerage check their educational sites about trading options.

Tips & Warnings

• Option trading is not suitable for all investor, make sure you read the risk and regulation of options trading at www.888options.com