Income Strategy
The Income Strategy incorporates shares and options; the use of options in conjunction with shares provides a powerful trading strategy for investors.
This strategy is popular with share portfolio and self managed superannuation fund (SMSF) investor.
Why trade the Income Strategy?
- Consistent monthly income
- Buy shares below current market value
- Sell shares above current market value
- Diversified portfolio
- Utilise dividends to increase income
The Strategy
The Income Strategy is a simple “4 Step” Process:
- Sell Put Options – Enter into a contract to buy shares: Receive Income
- Buy Shares
- Sell Call Options – Enter into a contract to sell shares: Receive Income
- Sell Shares
Covered Calls
Covered Calls are considered a conservative consistent income generating strategy. The Covered Call strategy involves selling call options on shares you own to generate a monthly income.
This strategy is one of the most powerful wealth creation strategies available to the private investor, considering the low risk nature and the income that can be generated.
It is a great alternative to a traditional buy and hold share portfolio as it can provide an additional income steam while still providing capital growth.
Why trade Covered Calls and Buy-Write Strategies?
- Consistent monthly income
- Sell shares above current market value
- Diversified portfolio
- Utilise dividends to increase income
- Takes advantage of time decay
Education
For education on the Income Strategy, Covered Calls, Buy-Writes Total Investor have detailed eBooks that outline how each strategy works with real life examples.
