The Ultimate Stock Option Trading Strategy...

Tip # 6 — The 10K Strategy to Make 100% Every Year

This is my favorite investment strategy, and the one I will give you the most help with. This is the strategy I used to make 124% on Fannie Mae while the stock fell by over 8% (for a free copy of how I did it, click here).

The 10K Strategy takes a little work, and at least a small understanding of stock options, but it is well worth the effort. (Actually, you don't even have to understand it all if you subscribe to my Options Tutorial Program, where I email you every trade I make once it is made. You can mirror my trades, and maybe even get better prices than I do.) You can order it here.

I call it the 10K Strategy because it isn't a sprint nor is it a marathon. You have to exert lots of effort, but you see the results every month when you get new cash in your account and count up your winnings.

Are you willing to make the effort?

How would you feel about yourself if you did not take the hour or two it might take to learn how to make over 100% on your money every year, even if your stock doesn't go up at all?

On the other hand, how would it feel to know that you understood a trading strategy that could multiply your net worth many times over in a few short years? Think of the exotic vacations you could take, the fancy cars you could buy, and the early retirement you could earn — all possible because you understood and used an investment vehicle (stock options) that scare most people to death.

This is no fishy proposition.

While making 100% every year may sound too good to be true, this is no fishy proposition. I am not giving you fish — mahi-mahi, red snapper or sea bass. Holy mackerel, all I'm doing is teaching you how to fish. I will give you a formula. Once you have learned it, you may be able to make extraordinary returns on your money every single year – without any help from me.

You will be proud of your newfound ability to achieve stock market riches with this formula. Your family and friends will love you. Your business associates will envy you. Your mother will take full credit for your success.

Here's the fine print.

Okay, anything this good must have some drawbacks, so here they are:

1. I can't guarantee a 100% return in one year. But I will show you every trade I made to make 124% in Fannie Mae (a stodgy old conservative stock) a year when the stock fell by 8.4%. You get this free report as a bonus for signing up for my free newsletter.
2. You will have to work. That means placing option orders with your discount broker on or about the third Friday of each month. When you subscribe to Terry's Tips, I will email you the exact trades I make in every portfolio using the 10K Strategy (for two months there is no extra charge). Once you understand my 10 Trading Rules, you probably won't need my help any longer. You will know exactly what to do each month on your own.
3. You will need to have access to a telephone on or about the third Friday (expiration day), and sometimes for adjustments at other times. This is not always easy, but I have made hundreds of trades on the telephone from a remote island in the Bahamas, a bastide in Provence, and a small village in the middle of Russia. So it is almost always possible.
4. Most of your profits will probably be taxed as short-term capital gains. If you are lucky enough to pick a stock that goes up steadily, you may end up with few or no short-term gains, and lots of long-term gains that are taxed at the lowest rates. (Even the long-term gains can be pushed off to some future year if you play your cards right).

Best of all, this system can be used in your IRA. You will have to set up an IRA account with a broker who allows option spreads (very few brokers do). My favorite broker is thinkorswim, (Barron's choice of the #1 software-based options broker for both 2006 and 2007) and I highly recommend them for option traders. Their rates are quite low, their website is option-friendly, and you will have more information about your options (including deltas, gammas, and other Greek measures) than you will probably ever need.

Does the stock have to go up for the 10K Strategy to be profitable? 

Most of our strategies are designed to make the most profit if the stock goes up.  But quite often, we can make money even if the stock goes down, as long as the drop is not too fast for us to make adjustments to the lower price level. (Sometimes, when our Composite Market Timing Model indicates the general market is in a downtrend, we create positions that do best if the market stays flat or falls a little.) Our Sears portfolio gained 50% in 2005 (in less than 5 months of existence) while the stock fell from $144 to $116.  The stock fell 6% on the very first day that we established the portfolio, and it took a full month for us to recover from that initial drop.  After that early shock, the stock drifted slowly down, giving us lots of time to adjust and gain profits each month.

A Strategy for Every Risk Level. 

The 10K Strategy is versatile. You can change the parameters of a portfolio (number of options, strike prices, length of time of the long positions, etc.) to achieve any risk profile you would like.  The 10K Strategy can be entirely different for different people, depending on their relative risk comfort level.  Many of our portfolios are designed to make 100% a year, but the risk level is understandably higher for these portfolios than many people’s comfort level. 

At the other end of the spectrum, we have our lowest-risk strategy designed to gain only 20% - 30% a year.  It is called the DIA Sleeping Giant portfolio, and is based on the tracking stock for the Dow-Jones Industrial Average (DIA). In its first 2 1/2 years, this portfolio has earned over 26% a year even though DIA fell in 2005 (after commissions – all of our portfolios are actual broker accounts, and all trading costs are included, unlike many investment newsletters who report their results without taking commissions into consideration).

In early 2007, in response to subscribers who wanted more action than the Sleeping Giant provided, but less risk than the 100%-possible-gainer portfolios, we have set up the 36% Solution portfolio which is designed to achieve a lower annual goal (36%) with a higher likelihood of achieving it every year, in good years and bad.

Over the first 4 months of existence, this portfolio gained $2,100 on the original investment of $10,000, or about 60% annualized.

2007 Experience with the 36% Solution

If you would like to see these Trading Rules and the exact option positions we used to achieve these results, all you have to do is buy a copy of my book (Making 36%) at the discounted price of only $12.94 - go to www.Making36Percent.com and enter the Discount Code TEE and you will receive:

1. An electronic version of Making 36%: Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad.
2. A copy of the paperback book mailed to you by first class mail.

This may seem a little hard to believe. For a total cost of $12.94, you will have everything you need to make superior investment returns for many years. It could easily be worth hundreds of thousands of dollars to you. There is nothing else for you to buy (unless you would like to learn even more, and become a Terry's Tips Insider).

Stock Options Strategy Book

In the book, I distill 30 years of option trading experience into a clear statement of an extraordinary options strategy. It is called Making 36%: Duffer's Guide to Breaking Par in the Market Every Year, In Good Years and Bad. The book is written with a golf motif to make it a little more interesting, but it is all about this unique way to make exceptional gains using stock options.

There are 18 chapters, each one only two or three pages long, so you don't have to spend hours learning all about options to get the basic idea. If you are interested in learning more about options, there are several appendices that will give you a good understanding of this investment alternative, including a discussion of the "Greek" measures of option prices.

The book was originally published at $19.95. You will receive an electronic version so you can start right away, and the paperback version will be mailed to you free of shipping and handling charges. Order it today at www.Making36Percent.com (Enter the discount code TEE and your cost will be only $12.94, including shipping by First Class mail).

Here is what the book looks like (but the good stuff is inside):

This could be the best investment decision you ever make. At least, you won't be risking much to learn the strategy. And it could change your investment outlook for a lifetime. Total cost, including shipping only $12.94 - www.Making36Percent.com (Enter the discount code TEE).

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