SUCCESS STOCK MARKET G INCOME GENERATING STRATEGIES Intelligent Cash Flow and Investment Decisions Written by Mike Coval SUCCESSSTOCKMARKET .COM Stock Market Income Training Incometrader.com 6338 Presidential Court #204 Fort Myers, FL 33919 Phone 239.603.6137 • Fax 813.884.5666 If your educational course came with live webinar training, you will be given access to your login procedures at your live event. Webinar Website: Webinar Username: Webinar Password: Webinar Time: Your 4 “Cash Flow” course videos are in DVD format to ensure compatibility with both PC and Mac. Copyright © 2013 SuccessStockMarket.com. All rights Reserved. Terms of use apply. Disclaimer Success Resources USA, The Success Stock Market Income Manual, and the Success Stock Market website are information services for investors and traders, and are not a recommendation to buy or sell securities, nor an offer to buy or sell securities. The principals, employees of, as well as those who provide contracted services for Success Resources USA are neither stockbrokers nor investment advisors, and are not acting in any way to influence the purchase of any security. The information provided is obtained from sources deemed reliable, but is not guaranteed as to its accuracy or completeness. It is possible at this, or some subsequent date, the principals, employees of, as well as those who provide contracted services for Success Resources USA may own, buy, or sell securities presented. The principals, employees of, as well as those who provide contracted services for Success Resources USA are not liable for any losses or damages, monetary or otherwise, that result from the content of The Success Stock Market income Manual and the Success Stock Market website. The principals, employees of, as well as those who provide contracted services for Success Resources USA have not promised that you will earn a profit when or if you purchase stocks, bonds, options, currency or futures. It is recommended that anyone trading in the financial markets should do so with caution and consult with a broker before doing so. Past performance of any principals, employees of, as well as those who provide contracted services for Success Resources USA may not be indicative of future performance. Securities presented in The Success Stock Market Income Manual and within the Success Stock Market website should be considered speculative with a high degree of volatility and risk. Copyright © 2013 SuccessStockMarket.com. All rights Reserved. Terms of use apply. A Introduction into Trading for Income You have made a wise choice in your next level of education, moving from stocks or even basic long calls and puts to a higher probability of successful trading. Option spreads give the investor a unique opportunity to invest less money, increase the rates of return and even show a profit even when the original trade moves against your current trend. To help learn these skills, we have created The Success Stock Market Income Course to share with you a specialized knowledge which, hopefully, will increase your rates of return while providing some cash flow along with lower risk trades. Course Goals: - Understand how options can be used in your portfolio - Learn how options are priced - Create income on stocks you own - Trade with Vertical Spreads - Achieve positive cash flow with Iron Condors Throughout this class, we will use several tools and websites. First and foremost, we will use the SuccessStockMarket.com website. SuccessStockMarket.com was created to help you search for stocks and their options as well as provide trading/investing opportunities with timely articles on potential set-ups. We will also use live charts and quotes from a brokerage platform. Since we cannot recommend any, we may use a couple of different brokers’ websites in the class. Please copy the contents of the 4 videos onto your computer to play. The files are saved in an .mp4 format to ensure compatibility with both PC and Mac Copyright © 2013 SuccessStockMarket.com. All rights Reserved. Terms of use apply. B Table of Contents Chapter 1 Getting Started…………………...………………………… Pg 1 Resources………………………………………………….. Pg 2 Chapter 2 Charting……………………………………………………... Pg 4 Indicators……………………………………………………. Pg 7 Patterns……………………………………………………... Pg 13 Chapter 3 Understanding Options……………………………………. Pg 19 Setting Up Accounts……………………………………….. Pg 25 Elements of an Option…………………………………….. Pg 33 Chapter 4 Buying Calls and Puts……………………………………... Pg 39 Buying Call Checklist……………………………………… Pg 48 Picking a Strike Price…….………………………………... Pg 52 Placing an Order…………………………………………… Pg 57 Chapter 5 Covered Calls….…………………………………………… Pg 59 Covered Calls Checklist…….…………………………….. Pg 65 Chapter 6 Debit Spreads…...……...………………………………….. Pg 72 Expectations and Scenarios………………………………. Pg 73 Debit Spread Checklist………………………..…………... Pg 77 Chapter 7 Credit Spreads……………………………………………… Pg 81 Bull Put Spread Checklist…...…………………………….. Pg 87 Closing the Trade………………………………………….. Pg 87 Chapter 8 Iron Condors……..…………………………………………. Pg 89 Copyright © 2013 SuccessStockMarket.com. All rights Reserved. Terms of use apply. C Copyright © 2013 SuccessStockMarket.com. All rights Reserved. Terms of use apply. SUCCESSS STOCK MARKE T Chapter 1 Getting Started To be a successful investor, we need to understand the alternatives available to us regardless of the market direction. These include various strategies for both the buyer and the seller. We will go over many of these throughout this training but for now, understand that market dynamics can and will change at any moment which may cause you to alter your original trading plan. You will learn that the more choices you have available to you, the better you can adapt to shifts in the market and last as an investor. In fact, the single most common trait among successful investors is their willingness to adjust or alter their trade IF their stock has changed its trend. This means that you’ll have to monitor your positions on a nightly basis if you’re trading options and once or twice a week if you’re trading stocks. Other types of investments will vary as well, but it’s always a good idea to know what is happening in your portfolio. An unexpected surprise that has been left alone for extended periods could be quite costly. Our Stance Our motivation comes from educating investors, of all types, how to trade stocks, options, currency and futures. Combined with a proven track record, you will find that the more education you have within the financial arena, the better you’ll sleep at night. For many investors, the days of buy-and-hold for the long-term are gone. Past decades have proven that prices can begin and end at the same price many years later. Our goal is two-fold, first and foremost is to encourage individual investors to become better stewards of their investments by generating monthly income, whether it is within a personal investment account or a self-directed account and secondly, to give a small portion of your trading proceeds to those who are less fortunate. Copyright © 2013 SuccessStockMarket.com. All rights Reserved. Terms of use apply. 1 To help aid in this teaching process, we will utilize the Success Stock Market website for convenient and easy access to resources. The Success Stock Market Site This website is where we’ll do most of our research and find all the educational articles. Automated stock scanners will quickly search the markets for the best or worst stocks. This top-of-the-line resource includes the popular Dividend Search and Weeklys Search. Automated fundamental analysis is run on every stock when you type in a ticker symbol, no need to manually grade a stock. Automated buy and sell signals are added to every chart to help you easily identify buy and sell signals. A market commentary is written twice a week to give you a better understanding of the overall trend and of any major upcoming news announcements. Homework trades are live trades that are followed from start to finish allowing each student the opportunity to see exactly how to trade a real position. 2 Copyright © 2013 SuccessStockMarket.com. All rights Reserved. Terms of use apply. SUCCESS STOCK MARKET Covered calls, spreads, LEAPS and stock picks are given each week so that you’ll have an opportunity to view what we think are some of the better investments. Some of these will be followed from start to finish meaning we stick with the trade until it is closed out. Others will simply be what we think is the best trade at this current moment in time. Investor psychology plays a large role in determining overall profitability of a student. We cover some of the thought processes that most investors fall into. These are written with a sense of humor and come from actual examples. Education articles are extremely useful and the Success Stock Market website has plenty of them. Need to find out what a technical term is or how it’s used – just check the Technical Talk, Options Institute, or Traders Analysis portion of the site. Opening or Updating an Account Since you’ve already gotten to this point, it’s safe to assume that you have committed yourself to the education process and maybe even opened up a brokerage account. Now that you have made the decision to include options with your trading, you will need to make sure you have the correct permissions within your account. When opening an account, it is important to find the correct type of brokerage firm. Since we will be trading both stocks and options within this training, we’ll concentrate on these types of firms. A simple Google search for “best online brokerage firms” will give you a great starting point. A couple of key points to look for are accounts that allow complex options (allows you to enter into spread trades to potentially fix a bad trade), IRA trading, and of course, the lower the commission cost the better.