narenmt Mr. Narendar’s investment experience spans over 8 years during several Bull and Bear market cycles. He has personally and actively traded in NIFTY futures and options, shares. All through the years, he was in business; he traded the stock market and has built a great deal of those experiences into his current trading philosophy & trading strategy. One important feature of a successful trader is to understand, what in the real world, it takes to earn a rupee. Should you require the services of an experienced trader who is able to provide invaluable and detailed mentoring services to assist you in developing your trading skills, I would suggest you contact him to discuss whether his mentoring service would suit you. Narendar has been certified by “The Options Institute” (Chicago Board Options Exchange). He has also completed NSE’s Certification in Financial Markets (Options Trading Strategies Module).

100% FOOL-PROOF MONTHLY INCOME PLAN (MIP) USING OPTIONS.

1 min read


Most of us know about SIP or systematic investment plan to invest in mutual funds, and other financial instruments. As you very well know such investment works only when the price of assets in which one has invested increases and thereafter gets profit on selling those assets like stocks, gold, etc. at higher price than cost price. Volatility has become a way of life in stock market.  Even best predictions or speculation fail to work in this kind of extreme uncertain volatile market condition. For instance, almost all world indices went down badly after the news of Greece crisis and later upon the news of bailout indices began to bounce back, now the indices is moving down again due to financial the problem in Europe. Technical analysis can predict stocks or indices direction to certain extent but they too have their own limitations, ultimately Mr. Market is the unbeatable king, who has always throws surprise to the little retail investor.

 
Here is a wonderful strategy to make money consistently in stock-market. Divide your investment portion into blue-chip stocks and gold ETFs as gold and stocks go almost vice-versa, now as stocks are finding their bottom, gold is touching its yearly high. Lets’s assume you have invested 2.5 lakhs in gold and 2.5 lakhs in stocks. Using appropriate options strategy, these investments(gold ETF and stocks) as margin one can make consistent profit every month using covered call and can get 60 to 100% return in one year by using a combination of gold ETFs, blue-chip stocks and options.

Here is a solution if retail traders have invested in stocks at higher rate and who have stopped trading and waiting for price to recover and exit at cost rate or marginal profit. For instance, if you hold Reliance at Rs. 2000 level and now reliance is trading around Rs.1000 level, you can still make profit even if reliance continues to be around Rs.1000 level for next one year using options strategy.  Please do note that investment in blue-chip stocks such as Reliance can be done when the market tanks down in panic/fear, please do read my last article on “Using Options to get paid to buy Blue-chip stock for less” to buy blue-chip stocks for cheap. In case, if you do not hold any blue-chip stocks, please use options to buy them at cheap rate. So in total options help you to buy blue-chip stocks for cheap, and also helps to generate monthly income which can be used for investment needs such as paying housing loan EMI /insurance etc and at the same time allow you to benefit from long-term return on investing.

(Update on last post: Reliance 960 put sold @10 is in profit now, book profit and exit)

Narendar Rathod, Options strategist, www.AssuredGain.com

narenmt Mr. Narendar’s investment experience spans over 8 years during several Bull and Bear market cycles. He has personally and actively traded in NIFTY futures and options, shares. All through the years, he was in business; he traded the stock market and has built a great deal of those experiences into his current trading philosophy & trading strategy. One important feature of a successful trader is to understand, what in the real world, it takes to earn a rupee. Should you require the services of an experienced trader who is able to provide invaluable and detailed mentoring services to assist you in developing your trading skills, I would suggest you contact him to discuss whether his mentoring service would suit you. Narendar has been certified by “The Options Institute” (Chicago Board Options Exchange). He has also completed NSE’s Certification in Financial Markets (Options Trading Strategies Module).

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11 Replies to “100% FOOL-PROOF MONTHLY INCOME PLAN (MIP) USING OPTIONS.”

  1. Your post are very interesting and thoughtful, I never knew this type of strategy to make money in trading. I generally buy some good stocks and hold them. Some stocks are now trading below cost price, I plan to use options for MIP, kindly guide me on the same.

  2. The comparison is thoughtful.
    The link in the end is not working. Page not found.
    Please check and update the right link.

  3. Dear sir,

    I read all of your articles daily without fal and learn a new things everyday .

    Under this startegy of the previous one which you mention to short put and buy good setyock more cheaper.

    But my question is that if we short reliance (or any other stock) put 96 at 10 and if reliance comes 900 at the end of the month then we have to buy reliance at 900 .ok. suppose after buy reliance at 9 ,it does not move significantly in 3-4 months ,then we have to just sit and see the price change and therewill be no more income then.

    please advise and clarify my question.

    Thanx a lot sir,

    Mahendra

  4. Hi mahendra, you question is really good. Just in case, if Reliance goes to 900 and give us an opportunity we buy that stock and at 900 and sell covered call every month at higher strike price, example 1100 call or 1200 whichever is least possible and therefore you will get the premium of those call as you are selling those calls. You will repeat this every month and can earn profit every month even if price of reliance stays at 900 for several months. Please do contact me if you still require any further clarification on the same, I will be glad to assist you. Happy trading options 🙂

  5. Hi Narendar
    Your strategy of selling the covered call option on the stock you own is impressive. But the return seems to be less. on an investment of 3 lacs (300 X 1000) , you get to earn around 3000 (300X10) per month only. please correct me if I am wrong
    thank you

  6. hi, kindly share the best and easy way to make a profit in f &o, how to choose stocks in covered call. in the current lot size and prices which is a good stock for covered call. someone told me to invest in indices , nse bse futures .

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