Introducing the Option Income Generator Service
January 14, 2012
Introducing the Option Income Generator Service
While this is clearly an unabashed promotion for our new service, we wanted to let our visitors know that we proud of the strategy we've put together and thought we'd crow about it a litte.
As the name implies, the Option Income Generator service is designed to produce income for investors on a monthly basis. However, we are not talking about a run-of-the-mill approach such as buying high-yielding stocks or bonds, which, in our opinion are flawed strategies. Instead, our proprietary trading service combines the power of tactical market timing with an easy-to-follow, conservative option writing strategy built to generate an income stream.
The service starts with keeping your account on the right side of the market. Toward this end the Option Income Generator employs State’s Daily Decision (DD) tactical market timing system, which is designed to profit from both rising and falling markets. The DD’s management strategy is very simple to define: We want to be fully invested in stock market indices (via ETF's) when stocks are rising and we want to be either in cash or short the market (again, via easy to use exchange traded funds) when stocks are falling.
The second part of the Option Income Generator service involves the creation of monthly income from the DD positions using a "covered call" options writing strategy.
A study released in September 2011 entitled "Risk Reducing and Income Enhancing Buy-Write Strategy" showed that investors who sell call options against a popular stock-market index make more money with less risk than investors who buy and hold that index.
The two strategies in the Option Income Generator create a multi-strategy, multi-manager approach designed to:
- Keep your accounts in tune with the market’s major trends
- Manage the risks of a severe market decline by moving to cash or being "short" the market
- Produce an income stream on a monthly basis
About the Service
The primary strategy of the Option Income Generator service is to strategically write out of the money options – more often referred to as "covered calls" – against current Daily Decision ETF positions, using both monthly and the relatively new weekly options on several popular ETF’s.
Commonly referred to as a "buy-write" or "covered call" strategy, the Option Industry Council found that over 15 years, investors who sold a call options that was 2% out-of-the-money and that expired in one month significantly outperformed the overall market index. (The service will sell calls higher or lower than 2% depending on market conditions.)
Two Income Generator Model Portfolios: Conservative and Aggressive:
The Option Income Generator will be an actively managed service, with two different levels of service: Conservative and Aggressive.
The "conservative" model will write covered calls with specific sell and buyback alerts on DD positions. Alerts will be issued at most a few times per month and in many cases only once a month.
The objective of the conservative approach will be to enhance revenues to one’s account by collecting additional option premium, through the sale of monthly options as long as there is an open Daily Decision position. Unlike other covered call services, options will not be sold until it is reasonably determined that a significant level of resistance (or support in the case of inverse positions) has been reached.
The second, more aggressive, level of the service will offer active traders the opportunity to follow the sale and buyback of options against DD positions on a more frequent basis. The objective will be fairly frequent selling and buying back of options at weekly or even intraday levels of resistance and support, attempting to maximize income against the DD positions. (Those who follow the aggressive approach should be prepared to monitor alerts on a frequent basis).
As with any trading endeavor, there will be times when market calls are clearly off and a major move down or up is missed. However, the beauty of selling option premium against positions already established is that there really is rarely an out-of-pocket "loss", only the possibility of an "opportunity cost" if the options are not sold or bought back at precisely the right moment.
The Managers
The Option Income Generator is a true multi-manager program. StateoftheMarkets.com founder Dave Moenning will provide service with his proven Daily Decision tactical timing system while David W. (aka "The Underground Trader") will manage the covered call strategy in the service. David has over 20 years of financial markets experience with some of the biggest names in the business and in fact was deeply involved with the launch of major ETF’s to retail investors. He has been employing a covered call strategy successfully for over five years.
Sign Up for the Option Income Generator Service Today!
P.S. The Option Income Generator produced income that exceeded the fees in the first week alone!
