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how how u can earn monvy in side market or tody market
how how u can earn monvy in side market or tody market
Answers
202 points
Lobo answered one year ago …
One good answer might be to own income stock. The high dividend allows good sleep whether the stock price goes up or down---within reason---or slides along without making nice moves either direction.
If you are not ready to buy and sell in rearranging your portfolio to buy income stock, you should consider time spreads, selling and buying options. A time spread (a/k/a as Calendar Spread, I think) is done by selling a covered call with a nearer expiration date and buying a long call with the same strike price, with the long call expiring several months farther out. You probably won't make a fortune doing that, but it can keep some income coming in. At the risk of stating the obvious, when the stock price stays below the options' strike price the nearer short call suffers time decay rapidly as expiration approaches while the farther out long call better maintains its price for awhile. Ah ha, the spread increases! You can order out for pizza! (We are assuming that your predicted sideways market continues.)
An almost realistic example: If you open the spread by selling the covered call for $100 and buy the long call several months farther out at the cost of $200, with same strike price, we can expect the covered call to expire worthless (in this sidewise market, remember) and you keep the $100. At that time the long call may still be worth around $150. You could sell then and profit $50 on this spread. I know the profit isn't much, but, hey, we're working with a frustrating sidesliding market here! Of course, you may be creating 1500 spread contracts, or even 5 or 6.
Generally, the risk of loss is not great. If the stock price goes up and the covered.call is exercised, you have sold your stock at a profit, at least from where the stock price was when you entered the spread. Then, if the stock price has really gone up since opening the spread, we can expect the long call to be going up for you, too, now worth maybe more than you initially paid for it. And you don't have to sell it if you expect the stock, and the long call, to keep going up. It would be possible to maintain the profit of the larger spread with careful use of sell orders. By closing both legs at the same time when the spread is larger than when you created it, however, you eliminate all risk and you don't have to take meals at your computer, and nobody wants to hang out at the broker's office...unless the secretary is extremely beautiful.
By the way, there are many other types of spreads. If you enjoy playing chess, you'll love figuring out the best spread moves to fit your style. It is possible to lose a little or make a little with any of them, but the odds are in our favor with a well placed spread.
2183 points
ChaosNantuko answered one year ago …
i'd go with stock options.
ITM vertical spreads with a short time span can make a lot of money in a short time period.
Covered calls can also be profitable in a sideways market.
If your willing to take more risk, butterfly spreads can be extremely profitable, but you should be extremely careful about how much risk your taking, and papertrade for a couple months before trying buterfly spreads with real money.
Finnally, even in a sideways market, there are equities going up, and equities going down, so you can always (after doing your due dilligence), buy whats obviously going up, and sell whats obviously going down.
-good luck
3963 points
MNSL answered one year ago …
Depend on type of experience, age you can apply different type of strategy in any market situation. Intelligent investors will always keep their money in the stock market in all type of markets. They will never leave the market and they will sell stocks only when they see no further growth and overpriced and when they find better stock to invest.
Intelligent investors will look for following stocks during side way market:
High dividend stocks with growth potential
Stocks extremely under valued and discounted to market
When promising growth stocks becomes value stocks
Neglected stocks with great potential
It is better if you find following characteristics in above stocks:
Higher future earnings
Effective cost control systems
Demand for their product and service and protection from competition
Protected market share for their products and services
Innovative
Owning of shares by management and insiders
I think Peter Lynch method will work better in a side way market.
In the meantime sometimes stocks with poor fundamentals go up without any reason, when top main investors and speculators become active in a side way market in some markets.
