This is one of the top strategies we teach at Power Trades University.
You can use options to literally negotiate with the market.
As an example… Apple is trading at $100 a share, but you’re only willing to buy it at $95 a share.
With the covered put method, you can negotiate with someone that currently owns the stock. You will tell them you want to buy it at $95. They will even pay you for your offer.
If the price never drops to $95, you don’t have to buy it and you get to keep the money they paid. If it does drop to $95, then you’ll be able to purchase at a discounted price.
Now, this isn’t something you can do for just any stock, there is a right and a wrong way to do it. You want to make sure you’re choosing the right stock at the right price in order for a covered put to be beneficial for you.
Image and article originally from thebrownreport.com. Read the original article here.