Retire early tip #7 - Nathan’s Smart Play: The unlosable trade

Hi ! This is my favorite move. It’s dollar cost averaging but with options. The trade is called a “collar” and let me tell you about Nathan, a savvy student who just scored a major win with his Nike stock. Nathan used a collar to protect his investment while still leaving room for some sweet upside. Said another way, in this example, Nathan created a scenario where he has an UNLOSABLE trade within the next 30 days. Here’s how he did it: Nathan’s Starting Move: 📈 Nathan bought some Nike stock at an average price of $75.77 because, as you can see on the chart, it was way below its SMAs and Nathan felt like it would be a fun investment. He knew the company, loved their marketing, knew how they make money, and everyone wears Nike. He didn’t think they were going anywhere anytime soon. But that said…as the stock started to rise in price Nathan wanted to make sure he was protected AND create cash flow—just in case things didn’t go his way. [Enable Images] The Play-by-Play of the Collar Trade: 1. Selling a Covered Call at $85: Nathan sold a covered call option with a strike price of $85. What’s the game plan here? 🧠By selling this call, Nathan agrees to sell his Nike shares if the price hits $85. In return, he pockets the premium from the call option which in this case was over $500. That’s like getting paid to wait and see if Nike stock goes higher! 2. Buying a Protective Put at $78: To protect his investment, Nathan bought a put option with a strike price of $78. This is his safety net—like a solid defense—because, if Nike’s stock price drops below $78, Nathan can still sell his shares at $78 no matter what the market says. It’s like having an insurance policy on his stocks! And, he used some of the premium from the covered call to pay for the insurance. So he still made cash flow when it was all said and done! The Final Result - An unlosable trade for the time-period of the options 🏆 - Upside Potential: If Nike’s stock soars above $85, Nathan might have to sell his shares, but he’s cool with that because he’s already making a profit from his original purchase at $75.77. Plus, he keeps the premium from the covered call! That’s close to a 12% return on his money, and he made cash flow, and he’s liquid to do it again! - Downside Protection: If the stock takes a nosedive, Nathan’s protected by that $78 put option. He won’t lose anything because he purchased the stock at $75.77. So, worst case scenario, he makes 2% on his money and then is liquid to do it again! This is how you get wealthy! 🥇 The collar trade is a smart strategy because it gives you a balance of risk and reward. So, whether you’re a beginner like Nathan or a seasoned investor, a collar trade could be the perfect strategy to help you sleep better at night knowing your investments are protected. Got questions or want to try a collar trade of your own? We’re here to help you [draw up the perfect trading strategy](. You’re amazing! Jerremy and the money-making crew If you no longer wish to receive these emails you may [unsubscribe](