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A stock stuck in a sideways pattern doesn’t produce capital gains. Shareholders are unsure if shares will eventually break out to the upside, or tumble to the downside.
This uncertainty plays right into our hands.
That’s because as uncertainty—and fear—rises, shareholders are willing to pay more for options “insurance” to protect their positions.
We give them the “option” of selling their shares to us if they drop below the sideways range. And they pay us thick streams of cash for our efforts.
And since we’ve already done our deep, fundamental analysis of the companies we’re interested in, we’re fine with someone taking us up on our low-ball offer.
That’s because we’ll own shares of a great company at a great price. (In the case of the company above, we’ll be in line to receive a generous 5.8% annual dividend.)
We can then turn around and make a “high-ball listing” (selling a call option) for even more income. These are three ways to rake in the cash on some of the safest companies on earth.
Bottom line: Since launching Palm Beach Current Income, we’ve executed 11 total trades in this “sideways” category. All closed as winners. And we walked away with an average annualized full-cycle return of 17.5%.
Current PBCI subscribers can review this week’s sideways trade right here.
Others can take part in a limited-time $1.5 million bet Tom’s offering on the PBCI service. Click here to learn more.