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The intent of this presentation is to help expand your financial education. Although the information included may be relevant to your particular situation, it’s not meant to be personalizedadvice. When it comes to investing, insurance, and financial planning, it’s important to speak to a professional and get advice that is tailored to your unique, individual situation. Allinvestments involve risk including possible loss of principal. Please see our Performance Discussion and Owner’s Manual; they are an important part of this discussion.
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We’re glad you joined us today.
We hope you enjoy these free resources
www.SniderAdvisors .com/Bonus
• PRESENTATION SLIDES
Immediate download of today’s slides
• E-BOOK: ‘THE ULTIMATE GUIDE TO WRITING COVERED CALLS’
✓Detailed guidebook for anyone wanting to learn more about ✓Covered Calls
• COVERED CALL SCREENER
✓Access to Snider Advisors’ free Covered Call Screener
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SNIDER ADVISORS
Snider Advisors is a boutique, registered investment advisor, based in Dallas, TX. Helping our clients strive to be better investors has been
priority number one since we opened our doors in September of 2002.
[email protected]
888-6-SNIDER (888-676-4337)
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A long-term strategy that uses a combination of stocks,
covered calls and cash-secured puts, and cash
management techniques.
WWW.SNIDERADVISORS.COM/BONUS
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CALL PUT PREMIUM
BUY Right to Buy Right to Sell Pays
SELL Obligated to Sell Obligated to Buy Earns
YOUR 2-MINUTE OPTION PRIMER
BUYERS have RIGHTS
SELLERS have OBLIGATIONS
An option is a contract (1 contract represents 100 shares) to buy or sell an underlying asset at a specified price (the strike
price) on or before a specified date (the expiration date).
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TYPES OF CALLS
NAKED CALLSYou do not own the stock
COVERED CALLSYou do own the stock
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You own/buy stock You sell a call
COVERED CALLS ARE TWO-PART STRATEGY
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You will receive option premium, which you get to keep, regardless
of the expiration outcome.
You are obligated to sell shares at the strike price on or
before the expiration date. WHEN YOU SELL A
COVERED CALL
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COVERED CALL EXAMPLE
DATE:
AUGUST 20, 2020
POSITION:
300 SHARES XYZ
COST BASIS:
$68.50 PER SHARE
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XYZ @ 67.85
Sep 18 2020 - 29 Days
Oct 16 2020 – 57 days
Nov 20 2020 - 92 days
Jan 15 2021–167 Days
Sep 18 2020 – 29 Days
DATE:AUG 20, 2020
67.85
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COST BASIS:$68.50 PER
SHARE
XYZ @ 67.85
67.85
Sep 18 2020 – 29 Days
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$67.85
$70.00$72.50
$65.00$67.50
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Trading Fee - $1.50
XYZ
08/20/2020 10:30 am ET
08/20/2020 10:30 am ET
Covered CallSELL TO OPEN 3 contract sofXYZ Sep 18 2020 70.00 CALL atthe Market, Good for the day.
1.80 1.901.85
1.80 1.901.85
POSITION:300 SHARES
68.04
-0.99 (211%)
67.75
67.85
2 x 4
835,111
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1.80 1.90
SELL TO OPEN
1 OPTION CONTRACT = 100 SHARES
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WHEN ARE YOU PAID FOR THE OPTIONS YOU SELL?
When you sell them.
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You own 300 shares of XYZ at $68.50 a share
COVERED CALLS ARE TWO-PART STRATEGY
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You earned option premium of $538.50*, which you get to keep,
regardless of the expiration outcome.*(300 shares x $1.80 premium - $1.50 trading fee)
You are obligated to sell 300 shares of XYZ for $70.00 on or
before September 18, 2020. 3 September
$70.00 XYZ Calls
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WWW.SNIDERADVISORS.COM/BONUS
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XYZ CLOSES ABOVE $70.00 STRIKE PRICE
CALLS EXERCISED
CALLS EXPIRE
Option Premium: $1.80
Cap. Appreciation: $1.50
Potential Profit: $3.30
Total Profit
$3.30 x 300
- $1.50
$988.50
XYZ CLOSES BELOW $70.00 STRIKE PRICE
Option Premium: $1.50
Cap. Appreciation: $0.50
Potential Profit: $2.00
Total Profit
$1.80 x 300
- $1.50
$538.50
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PO
SS
IBL
E E
XP
IRA
TIO
N
OU
TC
OM
ES
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RISKS AND BENEFITS
BENEFITS
• Cash Flow• Potential Boost to Return
RISKS
• Stock Risk• Limited Upside Potential
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COVERED CALL CHART
Sell $25 call at $3.00 Covered Call
STOCK PRICE
LOS
S /
PR
OF
IT
BENEFITS AND RISKS
Buy stock at $22
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CALL PUT PREMIUM
BUY Right to Buy Right to Sell Pays
SELL Obligated to Sell Obligated to Buy Earns
YOUR 2-MINUTE OPTION PRIMER
BUYERS have RIGHTS
SELLERS have OBLIGATIONS
An option is a contract (1 contract represents 100 shares) to buy or sell an underlying asset at a specified price (the strike
price) on or before a specified date (the expiration date).
WWW.SNIDERADVISORS.COM/BONUS
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You sell a put You set aside cashfor stock purchase
ANATOMY OF THE CASH-SECURED PUT
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You will receive OPTION PREMIUM, which you get to keep, regardless of
the expiration outcome
You are obligated to BUYshares at the strike price on or
before the expiration date.
WHEN YOU SELL A PUT
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OBJECTIVE SPECIFIC BUSINESS ANALYSIS PORTFOLIO DESIGN
Does it have the potential to generate income?
How will this stock fit into your portfolio?
Is this a stock you want to own?
STOCK SELECTION
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XYZ @ 55.67Sep 18 2020 – 29 Days
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Trading Fee - $0.50
XYZ
08/20/2020 10:30 am ET
08/20/2020 10:30apm ET
Covered CallSELL TO OPEN 1 contract ofXYZ Sep 18 2020 52.50 PUT atthe Market, Good for the day.
1.75 1.851.80
1.75 1.851.80
55.67
-0.99 (211%)
55.65
55.69
1 x 2
1,835,111
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1 OPTION CONTRACT = 100 SHARES
1.75 1.85
SELL TO OPEN
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You sold 1 SeptemberXYZ $52.50 Put
You set aside $5,250for stock purchase
ANATOMY OF THE CASH-SECURED PUT
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You EARNED option premium of $174.50*, which you get to keep,
regardless of the expiration outcome.*(100 shares x $1.75 premium - $0.50 trading fee)
You are obligated to BUY 100 shares of XYZ for $52.50 on or
before September 18, 2020. 1 September
$52.50 XYZ Put
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PUT EXPIRES
PUT EXERCISED
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PO
SS
IBL
E E
XP
IRA
TIO
N
OU
TC
OM
ESXYZ CLOSES ABOVE $52.50 STRIKE PRICE
XYZ CLOSES BELOW $52.50 STRIKE PRICE
• You earned $174.50 option premium
• You earned $174.50 option premium
• You are assigned 100 shares at $52.50/share
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RISKS AND BENEFITS
BENEFITS
• Cash Flow• Potential Boost to Return
RISKS
• Stock Risk• Limited Upside Potential
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CASH-SECURED PUTSTOCK
LOS
S /
PR
OF
IT
STOCK PRICE
CASH-SECURED PUT CHART
WWW.SNIDERADVISORS.COM/BONUSBENEFITS AND RISKS
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A long-term strategy that uses a combination of stocks,
covered calls and cash-secured puts, and cash
management techniques.
WWW.SNIDERADVISORS.COM/BONUS
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CALL PUT PREMIUM
BUY Right to Buy Right to Sell Pays
SELL Obligated to Sell Obligated to Buy Earns
YOUR 2-MINUTE OPTION PRIMER
An option is a contract (1 contract represents 100 shares) to buy or sell an underlying asset at a specified price (the strike
price) on or before a specified date (the expiration date).
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JAM @ 32.61Sep 18 2020 – 29 Days
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Trading Fee - $1.00
JAM
08/20/2020 10:30 am ET
08/20/2020 10:30 am ET
Custom Strategy
32.61
-0.99 (211%)
32.58
32.61
1 x 2
1,835,111
BUY 100 shares of JAM at the Market. Good for the day.
SELL TO OPEN 1 contract ofJAM Sep 18 2020 30.00 PUT atthe Market, Good for the day.
SELL TO OPEN 1 contract ofJAM Sep 18 2020 35.00 CALL atthe Market, Good for the day.
32.6132.58
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1.45 1.55
1.20 1.30
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You EARNED option premium of $264.00*, which you get to keep,
regardless of the expiration outcome.
*(100 shares x $1.45 call premium - $0.50 trading fee)*(100 shares x $1.20 put premium - $0.50 trading fee)
You are obligated to SELL 100 shares of JAM for $35 and you are obligated to
BUY 100 shares of JAM for $30 on or before September 18, 2020.
1 September
$35 Call
1 September
$30 PutWWW.SNIDERADVISORS.COM/BONUS
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JAM CLOSES ABOVE $35.00
• You sell 100 shares of JAM at $35/share
JAM CLOSES BELOW $30.00
• You buy additional 100 shares of JAM at $30/share
CALL EXERCISEDPUT EXPIRES
PUT EXERCISEDCALL EXPIRES
CALL EXPIRESPUT EXPIRES
JAM CLOSES BETWEEN $35.00 AND $30.00
• You own 100 shares of JAM at $32.61/share
• REPEAT PROCESS
• BUY ANOTHER 100 SHARES & SELL 2 COVERED CALLS
• SELL 2 COVERED CALLSMO
VIN
G F
OR
WA
RD
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We hope you join us for upcoming
educational events
Snider Investment Method Deep Dive
Wednesday, August 26th
Register at SniderAdvisors.com/Events
U P C O M I N G W E B I N A R
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We’re glad you joined us today.
We hope you enjoy these free resources
www.SniderAdvisors .com/Bonus
PRESENTATION SLIDES
Immediate download of today’s slides
• E-BOOK: ‘THE ULTIMATE GUIDE TO WRITING COVERED CALLS’
✓Detailed guidebook for anyone wanting to learn more about ✓Covered Calls
• COVERED CALL SCREENER
✓Access to Snider Advisors’ free Covered Call Screener
WWW.SNIDERADVISORS.COM/BONUS