Write Your Own Dividend Checks

Stop Chasing Yields and Start Collecting More Income

Create your own steady stream of multiple ongoing
income payments like $1,030... $2,626... and $3,228...
with this Foolish investment strategy that's
made money on 9 out of every 10 trades!

Dear Fellow Investor,

It's insane...

Investors today are chasing yields like Wile E. Coyote trying to catch the Road Runner. And we all know how that one turned out.

The problem is that yields on traditional "safe haven" investments are at all-time lows.

Take government bonds, for example. Today, yields on 10-year government bonds are lower than they've been during the entire adult lifetime of anyone born after 1934. Lock your $10,000 up for a decade, and you'll earn less than 50 cents a day!

And CDs? If you're actually getting 1% returns, you're lucky!

Even "investment grade" corporate bonds are barely keeping up with inflation right now.

And thanks to the great dividend rush, the price of some dividend stocks has risen dramatically. As a result, the yields on some popular utility stocks have plunged to their lowest levels in 14 years!

Not to mention the annoying little fiscal cliff issue. A compromise on those tax increases could very well result in dividends being taxed as ordinary income for many investors. Which means those investors could soon be handing over an even bigger chunk of their dividend checks to Uncle Sam.

To add insult to injury, greedy investment banks have been luring yield-hungry investors with all sorts of half-baked income products. Many of these have hidden tax liabilities, charge exorbitant fees, and are riskier than a teenager in a souped-up Mustang.

And with confusion reigning in our nation's capital, it's only going to get worse in the coming weeks. Because everybody and their brother is going to be beating the bushes looking for safe income-generating strategies.

So what's a yield-hungry investor trapped in a low-yield environment supposed to do?

Well, I've got good news for you today: There's a better "out-of-the-box" way to generate all the income you want, without taking on big risks!

That means you can stop chasing yields and start collecting MORE income.

Because with this powerful income strategy, you're no longer held hostage to the market.

You don't have to wait in vain for the government to increase interest rates... or for dividend stock prices to return to reasonable valuations... or for the corporate bond cycle to play out...

Instead, you're in charge. You're regularly writing yourself your own 'dividend checks' — like $1,030 on American Express, $2,626 on Monsanto, or $3,228 on Portfolio Recovery Services.

And you're doing it over and over again regardless of whether the market goes up, down, or sideways.

What is this amazing income-generating strategy? It's options! That's right, options.

Discover How Any Fool Can Make Money on 9 out of 10 Trades... With Options!

Hi, I'm Jeff Fischer, advisor of Motley Fool Options. And if you'll give me just a few minutes, I will show you how easy it is regularly rack up gains like $1,030... $2,626... and $3,228... with option strategies so safe they'll allow even the most conservative investor to sleep like a baby at night.

Now, you might have heard that trading options is highly "complex" and overly "risky". And that's perfectly true — the way most people trade options.

But NOT the way we do it here at Motley Fool Options.

You see, most traders view options as a lottery ticket. They buy high-risk, high-reward options for pennies on the dollar hoping for a big hit.

Here at The Motley Fool, we approach things quite differently. Because we approach options as investors. We invest in sensible options strategies alongside our stock portfolios. We use them to reduce our overall risk and to safely generate steady, dependable income.

This approach has been hugely successful for us.

In fact, we've MADE money on 9 out of every 10 trades we've closed in our Motley Fool Options service. Not only that, but we've done it for more than three years running!

Let me say that again. Because it bears repeating. We've started with something most investors consider highly risky, even dangerous — options. And we've turned them into an amazingly consistent income tool that would make even the most buttoned-down investor feel comfortable.

This Investor Says Trading Options the Foolish Way "... has been more profitable than I ever imagined."

And that's exactly what has allowed our Motley Fool Options members to generate a steady stream of income while risking less cash upfront.

These are just a few of the first-hand accounts I've received from hundreds and hundreds of grateful investors just like you who are now using options to generate steady income from rising, falling, and even sideways-moving stocks. All while risking less capital upfront than most stock investors!

How I Started Generating All the Income I Needed With Options

I've been using options to generate income for more than a decade now. When I first started using options back in 2000, the stock market was making a fast retreat. And I realized that I needed more ways to make money than investing in stocks alone.

So I started looking at the alternatives, and I was excited to discover how versatile and how easy options could be. I wanted steady income, and options were clearly the answer.

I'm very glad that I started using options when I did. Because the S&P 500 has gone virtually nowhere since 2000. But with options, I've been able to generate steady income just about whenever I wanted.

With options, I'm no longer a victim of the market, or at the market's whims. I don't need stocks to go up to make a profit. Instead, I'm in charge, writing myself income checks on a regular basis simply by writing options that expire every month — even in a flat or down market.

In fact, with options, it no longer matters to me if the market goes nowhere. In fact, options soon became my main source of income!

By learning a few simple options plays, you too can generate income month after month. To use a football analogy, you can run the same play over and over again, even on the same company.

Take Portfolio Recovery Associates (PRAA), for example. We set up our first income play on PRAA back in August 2011.

Since then, we've collected three income payments of $1,122... $1,140... and $966. That's $3,228 in extra income.

All using one very basic income-generating option play. It's called "put selling". And it's one of the very first strategies I learned when I first started investing with options. It's still one of my 'go to' favorites for generating income today.

That's because it puts (pardon the pun) all the odds in your favor.

Let me explain. To do that, I need to share with you...

The #1 Reason Most Investors Lose Money With Options

As you may already know, an option is just a simple contract. It gives you the right to buy or sell 100 shares of an underlying stock at a set price (the strike price) by a set date in the future (the expiration date).

And as you've probably heard, there are two kinds of options: a call option and a put option. Call options go up in value when the stock price goes up. Put options go up in value when the stock price goes down.

Now the thing about options is that you can buy them... or you can sell them.

Now buying options can be risky. Because they expire in a number of months...because you have to pay a premium to buy them... and because you have to be right about the share price, the direction, the magnitude and the timing of the move. And all that works against you when you're buying options.

In fact, studies show that 75% of options held to expiration expire worthless. And that leaves the option buyer with nothing.

But in Motley Fool Options, we mostly sell options. Which puts all the odds in OUR favor. And it works perfectly with our goal, which is to make regular income that complements our long-term stock holdings.

Because when you SELL options, you get paid money right upfront. And when the option 'expires worthless' (as they usually do), the buyer gets nothing and YOU, the seller, keep all the income!

And that's why I love selling options so much!

Let me show you how Motley Fool Options investors used this simple options strategy to turn Portfolio Recovery Associates into some very welcome income...

Turn Your Stocks Into Income Gravy Trains

We've recommended selling puts on Portfolio Recovery Associates three times so far. And that's allowed us to collect a steady stream of income payments over the last year.

Here's how it works: Portfolio Recovery Associates is a debt collection company. Its motto is "giving debt collection a good name."

Back in August 2011, we had done our Foolish homework on Portfolio Recovery Associates. We had put the business under a microscope. Dug through the underwear drawers. Made a nuisance of ourselves asking questions.

When we were done, we felt we knew as much about the underlying business as the management team. And we were confident that the company was ripe for a put selling play.

We knew that by selling puts on the company, we would either make a boatload of income... or we'd have the opportunity to buy the shares at a ridiculously low share price in the future.

So on August 9, 2011, with the stock trading at $68.51, we recommended that Motley Fool Options members SELL the December 2011 $65 puts. And as long as the stock did not drop below $65, we would keep all the income.

So how did we do? We closed our position in December right before expiration, locking in $374 of income for every contract we sold.

If you had sold just three put contracts when we recommended them, you would have pocketed $1,122 in income.

But we weren't done yet. There was still plenty more income to be had. So in January 2012 we told Motley Fool Options members to sell the June 2012 puts and collect $380 per contract.

Again, if you had sold three put contracts when we recommended them, you would have pocketed $1,140 in income when the options expired worthless. (That just means that the buyer walked away with nothing, and YOU, the seller, kept all the income!)

Then in June 2012, we told Motley Fool Options members to sell the September puts and collect $322 per contract. If you had sold three contracts, you would have pocketed another $966 in income when the options again expired worthless.

That's a total of $3,228 in extra income... from just one stock... by adding a few simple options plays.

Now I think you can see why I love this strategy so much.

So Why Isn't Everybody Selling Puts?

So you might be wondering: If it's so easy, why don't more people do it?

Well, the simple answer is that they're afraid they'll end up owning the shares. You see, with put selling, if the stock drops dramatically, you end up buying the shares at the strike price you agreed to when you sold the option (but you still keep the income the put options paid you, so your cost basis on the stock is even lower than the strike price!).

And that's the big mistake that most people make with put selling. They do it on stocks that they would never want to own!

But here at Motley Fool Options, we ONLY sell puts on stocks that we would love to own at a lower price. It's like entering a "limit order" to buy stocks you like at a steep discount.

Now, at the risk of bragging a bit, I do want to point out here... with a more than 90% success rate on our closed trades, we don't end up buying many stocks when we sell puts here at The Motley Fool.

But we would have been very happy to buy Portfolio Recovery Associates for $61.78. Why? Because our estimated fair value of those shares was easily over $85. And in fact, the stock trades for around $95 today.

The good news is, with Portfolio Recovery Associates, the shares never dropped below our put strike price.

So we generated $3,228 in total income in a little over a year... on one single strategy... without ever having to buy a single share of stock.

Finally... You Can Stop Being Held Hostage by the Market

Now, put selling is a great way to generate income, and it's a great place for beginners to start.

And it doesn't matter if you have experience with options or not. Because we'll show you step-by-step exactly how to execute put selling and other income strategies in Motley Fool Options advisory service...

Learning to trade options was one of the most empowering experiences of my life. Finally, I was no longer held hostage to the market. I could generate safe, steady income for my family and I could do it month after month with confidence.

And that's our mission here at Motley Fool Options. To help individual investors just like you learn to trade options with ease and confidence. Which is why you get a lot more than just investing recommendations with Motley Fool Options.

You get a comprehensive education in options investing, from soup to nuts. So instead of spending a fortune on books and seminars, you can get up to speed quickly using our essential guides and following our step-by-step instructions.

Knowledge really is power. By adding options to your trading toolbox, you'll be giving yourself more than a great source of extra income... You'll be giving yourself the confidence to generate all the extra income you need under all types of market conditions for the rest of your life. Now that's empowering!

We provide plenty of "hand holding" for those who want it. We show you exactly how to get started — including how to place every trade. And we'll tell you whenever we need to follow up on a position with another trade down the road. You'll know exactly what your maximum risk and potential rewards are with each trade you make.

Nobody is going to make options clearer, easier, more logical, and more lucrative for you. And as a Motley Fool Options member, you'll have online access to me and my team at any point.

You'll get everything you need. Including the tools to make a handsome string of profits when stocks go up (as you've just seen) and when they go down. And even when they stay flat!

Click here to get started today.

Now I'd like to show you two more income-generating strategies that enable members to take advantage of special situations.

They may seem a bit advanced to you right now if you're an options novice. But members tell us that with the training and guidance they receive, it doesn't take long before they're executing trades like these and really turbo-charging their returns.

And if you've traded options before, you should be able to dive right into these lucrative strategies to generate even more income.

Advanced Strategy #1:
How to More Than DOUBLE Your Stock Returns With Options

By adding options to your existing stock investments, you can make more than double the gains you would have made if you owned just the stock. Even on your best dividend stocks!

Take American Express (NYSE: AXP), for example.

American Express shareholders (including super-investor Warren Buffett) have made a very nice 13.3% since August 2011. That's counting both stock gains and dividend payments. Not bad.

But Motley Fool Options members have done much better. In fact, they've pulled in 28.4% gains as of Friday, Nov. 16. And they're hoping to earn even more on this open position!

And they didn't do anything difficult or risky to get there.

Instead, they used an easy-to-execute options strategy that generates income month after month...

The strategy is called a "covered strangle" because your put and call options essentially "strangle" the current stock price. So long as the stock's price merely wanders anywhere between the two strike prices you choose, and even if the price goes a bit beyond either, you profit!

Writing covered strangles is a powerful yet safe way to squeeze significant additional profits out of slow-moving stocks trading at or near their fair value. Stocks like American Express.

American Express is the poster child for a solid stock trading near fair value. It's a large blue-chip stock, a well-respected brand that generates a lot of cash. But it's also a go-nowhere stock. Its stock price today is about where it was nine years ago.

And that makes it a great candidate for selling strangles for income again and again. Because American Express isn't likely to move out of its narrow trading range anytime soon. And that means that when your strangle expires, you keep all the income!

When we recommended the American Express strangle to Motley Fool Options members in August 2011, the shares were trading for $48.78 each. We suggested members purchase 100 shares for $4,878 if they didn't already own them.

Obviously not every trade we recommend will require this type of investment! Many of our recommendations only require a few hundred dollars and are set up to double your money on small stock moves. This is just one example of a blue-chip stock that you can buy, then write covered strangles on for strong income. And you might already have several of these in your portfolio.

At the same time we told members to buy the stock, we told them to write a strangle. And that strangle generated $282 in income in October 2011 — assuming you entered just one contract on 100 shares. Now, that might not sound like much — although it was a 5.7% yield in just a few months — but the beauty of this strategy is that you can do it over and over and over again to make money on your slow-moving stocks.

Turn Slow-Moving Stocks Into Cash Cows

That's exactly what we did with American Express!

We wrote more covered strangles on our shares. And we made $231 in additional income in January 2012... and $78 in additional income in June 2012... and as I write this we are sitting on an additional gain of $439 from our fourth strangle with approximately two months to go to expiration.

Members have made a total of $1,030 in extra income on American Express as of Friday, Nov. 16. Just from making four options trades! And if you had entered more than one strangle, you would have made much more than that.

And that income is IN ADDITION to the 13% ($640 total) we made on the stock's rise — AND the $96 we collected in dividends.

So we collected a total of $1,766 on a modest 100-share position in American Express in about 15 months (and we're nowhere near done yet).

Now compare that to ordinary shareholders (including Mr. Buffett), who pocketed just $736 ($640 on the 13% stock gain plus $96 in dividends) for every 100 shares they owned, and I think you'll see why we love this income strategy.

So by spending just a few minutes writing a few simple strangles a year on our American Express stock, we more than doubled our income! More than doubled!

Click here to grab your chance to DOUBLE your gains from blue-chip dividend stocks!

Thousands of Foolish Options Investors Show You the Way

If you've been investing with options for a while and you're sitting on a bunch of slow-moving blue chips, this is a great way to turn them into ATM machines and start adding some income to your bottom line!

With Motley Fool Options, we give you an entire smorgasbord of ways to generate income with options. Because one strategy does NOT work for all stocks! And one strategy does not work for all markets. And one strategy does not work for all investors!

That's why there are plenty of income strategies to choose from in Motley Fool Options, from beginner to advanced.

If you want lots of hand-holding, you've got it. If you've been trading options for years and you just want a bunch of solid income-generating ideas and the occasional question answered, we've got that too. You'll get all the help you need.

And don't forget, our team of options experts here at The Motley Fool will be with you every step of the way.

Plus, thousands of investors in Motley Fool Options will also share their wisdom and experience with you. Many of them started out never having invested with options before, and now they are paying it forward by helping new members like you.

We'll make it easy to pick and choose which strategies are best for you. Start with the basics and then work your way up to more advanced strategies as you feel comfortable.

Here's one my friend and Motley Fool Options Co-advisor, Jim Gillies, loves to run...

Advanced Strategy #2:
Get All the Benefits of Owning a Stock Immediately Without Forking Over a Boatload of Cash!

What members are saying about Motley Fool Options: "Scrupulously honest" "You are very attentive to the needs and goals of your subscribers, and you are scrupulously honest in how you measure and disclose your results." – R.M., Highlands Ranch, CO "Actionable and profitable" "MFO has not only taught me a lot about options (with more still to learn), but has also provided me with a number of actionable and profitable recommendations." – Brian J., Westchester, NY "Building family wealth..." "I want to say thank you for what you do... I can't begin to tell you what this means for me and my family!" – R. Stone, Little Rock, AR "Great results..." "I'm here and excited! I've followed your option instruction and recommendations... and have been exceedingly pleased with the results! Thanks for your great work!" – M.M., Stillwater, OK "Excited and impressed..." "I'm excited by the quality of this service so far, and impressed with the volume of educational material the Fool team has put together!" – R. Shepherd, Bellingham, WA "Thanks..." "I never ever would have thought about using options in my years of investing if it wasn't for Jeff and Jim. Thanks guys!" – S.S., Melrose Park, IL "I'm thrilled..." "I'm thrilled The Motley Fool added this service — Jeff and Jim make for a powerful and exciting options team." – Geoffrey W., Pittsburgh, PA "This month paid for my options subscription..." "This month paid for my options subscription but taught me so much more, I feel in control of my finances and am really enjoying all the lessons. Thanks again to all the Motley Fool Options staff and fellow message board fools!" – A. Karrels, Albuquerque, NM START NOW

Imagine being able to profit on a stock's upswing without buying it. It's easy to do with a synthetic long.

I know, it sounds like a pair of polyester pants that need to be hemmed... but it's actually a very versatile and profitable income strategy! And it gives you the benefits of owning a stock, without forking over the cash to buy it today.

Motley Fool Options members have used this strategy to make buckets of income on Monsanto for nearly three years in a row!

When we first recommended the synthetic long on Monsanto in March 2010, the stock was trading around $72.70 a share. So if you wanted to purchase 100 shares of Monsanto, you would have had to fork over a whopping $7,270.

Or, instead of risking a boatload of cash... you could have purchased the synthetic long. And the total cash cost would have been just $205.

Now as experienced traders know, this trade would have had a margin requirement. But even a 30% margin requirement would only mean you would have needed to set aside an additional $2,305 in reserve.

And that's still a whopping $4,965 less than the cost of the shares!

But that's not even the best part. The best part is that once you set up a synthetic long, after the stock moves up to where you think the stock is fairly valued, you can make a series of income overlay trades on it quarter after quarter. And you can continue to roll the trade forward into the future, so you can keep generating income from it...

It's just like selling calls against stocks you own. Only in this case, you didn't have to buy the stock upfront!

That's exactly what we did with Monsanto! We've racked up a steady stream of income over the past three years.

From March 2010 to today, we've made a series of follow-on income overlay trades, and we've extended the position out to 2015.

All told, we've collected $1,586 in income. And our total cash cost was only $205. So that's $1,381 in profits, and we never touched our reserve.

And if we were to shut down the synthetic long today (of course we're not about to do that to a nice cash cow like this, but if we were...), it would put another $1,245 in profits in our pockets for a total return of $2,626.

Now compare that to the guy who forked over $7,270 for the shares. He would have pocketed a total gain of $1,885, including share price appreciation and dividends.

So the shareholder forked over a whopping $7,270 in cash to make $1,885 in profits.

But the option buyer forked over just $205 to generate $2,626.

And that's why synthetic longs are such a great investing tool. You can put up MUCH less cash upfront — in this case only $205! And you can use the buying power of your other portfolio assets to generate a nice bundle of income — in this case a very nice $2,626!

Now, synthetic longs aren't for everybody. But for those who don't mind the margin requirement and want to generate some attractive returns, they can be a great addition to any options portfolio!

And that's the beauty of Motley Fool Options. We offer you dozens of trade opportunities every month. Everything is à la carte. So you can pick and choose the opportunities that are best for you, according to your investment goals. It's like getting a customized options investing service just for you!