The Sharelord strategy is a low risk, conservative strategy and that's why it's one of the best investment ideas of 2014. The investment is low risk because the we own the shares and what further reduces our risk is the purchase of an insurance policy. If you buy home insurance to cover your property then you would be crazy not to buy an insurance policy on the stock market.
Best Investment Ideas: Buying Our Shares At Wholesale
A Sharelord is also purchasing the shares at a wholesale rate. How do we do that? By renting out our shares, in other words selling call options over our shares. When we sell call options, we get paid up front, day one and by subtracting what is paid by renting our shares, from the purchase price of the shares, you can agree that the Sharelord buys their shares at wholesale.
Normally when we buy our shares and rent them out, the premium that we receive up front, a portion of it is used to purchase an insurance policy. We have purchased an insurance policy utilizing none of their own money.
By the renting out our shares, we agree to sell our shares at a certain price and at a specific time to the person who is renting them from us. This person is known as the speculator because they are betting for the market to go up and that's the only way they can make money. As opposed to the Sharelord who gets paid up front and makes money regardless of market direction or performance. Now you know why Sharelord is one of the "best investment ideas" of 2014.
One Of The Best Investment Ideas of 2014: Come And See For Yourself With An Example.
It will be clear after this example why this strategy is one of the best investment ideas of 2014. We buy our shares for $20.50 and rent them out at $21.00. By renting them out, the speculator has purchased a call option and they have paid $1.20 for that call option and that goes straight into our brokerage account. What that means is that the speculator has the right, but not the obligation to purchase the shares from us if the share price is above the rental price of $21.00.
Then we will use a portion of the $1.20 to purchase an insurance policy to cover our downside risk. Let's say we buy an $18.00 insurance policy for $0.40. This will leave us with $0.80 up front profit.
If the share price finishes above $21.00 by a certain time, then the speculator will purchase the shares for $21.00. We have made up front, $0.80 and now will be making a further $0.50 capital gain as the shares were sold at a higher price than what we purchased them for. We end up making $1.30 profit, which is a 6.3% return. This return is made within a month because that is how long a Sharelord normally stays in a trade.
The Sharelord may stay in the trade for longer, if they do that means the stock price did not finish above their rental price so all the "Sharelord" needs to do is rent their shares out again and purchase another insurance policy and they repeat the process no matter how long they own the shares.
Sharelord is one of the best investment ideas because you are continually generating an income on a monthly basis and you know how much you are going to earn up front, your risk, this strategy is recession proof, you can do it from anywhere around the globe and you have complete control over your investment and that's why it's one of the best investment ideas going around.
Discover one of the best investment ideas of 2014 by ordering your FREE getting start pack today.
Best Investment Ideas: Buying Our Shares At Wholesale
A Sharelord is also purchasing the shares at a wholesale rate. How do we do that? By renting out our shares, in other words selling call options over our shares. When we sell call options, we get paid up front, day one and by subtracting what is paid by renting our shares, from the purchase price of the shares, you can agree that the Sharelord buys their shares at wholesale.
Normally when we buy our shares and rent them out, the premium that we receive up front, a portion of it is used to purchase an insurance policy. We have purchased an insurance policy utilizing none of their own money.
By the renting out our shares, we agree to sell our shares at a certain price and at a specific time to the person who is renting them from us. This person is known as the speculator because they are betting for the market to go up and that's the only way they can make money. As opposed to the Sharelord who gets paid up front and makes money regardless of market direction or performance. Now you know why Sharelord is one of the "best investment ideas" of 2014.
One Of The Best Investment Ideas of 2014: Come And See For Yourself With An Example.
It will be clear after this example why this strategy is one of the best investment ideas of 2014. We buy our shares for $20.50 and rent them out at $21.00. By renting them out, the speculator has purchased a call option and they have paid $1.20 for that call option and that goes straight into our brokerage account. What that means is that the speculator has the right, but not the obligation to purchase the shares from us if the share price is above the rental price of $21.00.
Then we will use a portion of the $1.20 to purchase an insurance policy to cover our downside risk. Let's say we buy an $18.00 insurance policy for $0.40. This will leave us with $0.80 up front profit.
If the share price finishes above $21.00 by a certain time, then the speculator will purchase the shares for $21.00. We have made up front, $0.80 and now will be making a further $0.50 capital gain as the shares were sold at a higher price than what we purchased them for. We end up making $1.30 profit, which is a 6.3% return. This return is made within a month because that is how long a Sharelord normally stays in a trade.
The Sharelord may stay in the trade for longer, if they do that means the stock price did not finish above their rental price so all the "Sharelord" needs to do is rent their shares out again and purchase another insurance policy and they repeat the process no matter how long they own the shares.
Sharelord is one of the best investment ideas because you are continually generating an income on a monthly basis and you know how much you are going to earn up front, your risk, this strategy is recession proof, you can do it from anywhere around the globe and you have complete control over your investment and that's why it's one of the best investment ideas going around.
Discover one of the best investment ideas of 2014 by ordering your FREE getting start pack today.
About the Author:
Discover some Good Investment Ideas and how they can change your finance forever. Work With Danny Younes educates you on investments that will get you out of the rat race and and working on your passions.