How Millionaires Supplement Their Income
It’s widely known that millionaires employ straightforward trading strategies to enhance their income. Typically, they rely on one or two primary sources of income and seek uncomplicated investment opportunities to augment their financial portfolio. This creates a powerful cycle of wealth accumulation that gains momentum and becomes unstoppable.
Before delving into the strategy, let’s first review the recent market developments of this week.
Walmart Crushing It
Walmart shared big news this week! They’re doing a three-for-one stock split, making shares more affordable for their employees. The new shares will be available on February 23, with the plan to let more people join Walmart’s stock purchase program.
But that’s not all – Walmart is growing even more. They’re opening 100+ new stores and revamping 650 existing ones in the next five years. These will include smaller Walmart Neighborhood Markets and revamped Supercenters. Walmart’s aiming for a “Store of the Future” vibe, with better layouts and cool tech to make shopping easier.
CEO John Furner also mentioned pay raises for store managers, boosting their base pay from $117,000 to $128,000 per year. Non-salary workers will see their minimum wage rise to over $18 per hour.
Walmart’s been doing well, especially in groceries, and their sales rose by 5% in the third quarter of 2023, reaching $160.80 billion.
Food is Getting Cheaper?
Switching gears, the United Nations’ Food and Agriculture Organization shared that food prices have gone back to 2021 levels. After hitting record highs in 2022, the Food Price Index dropped to 118.5 points by December 2023, though it’s still higher than before the COVID pandemic.
Exciting times for Walmart and some relief for food prices!
Infographic courtesy of Statistica
How Millionaires Supplement Their Income:
In the powerful, profitable world of options trading, mastering versatile strategies is crucial. One such strategy that has gained popularity among traders is the call debit spread, also known as the bull call spread. Let’s explore the various benefits that make call debit spreads a compelling addition to your trading arsenal.
Limited Risk, Defined Reward:
One of the standout features of call debit spreads is their inherent risk management. By simultaneously buying and selling call options, traders can define their maximum loss upfront while capping potential profits. It’s akin to having a safety net in place, providing a level of comfort in the often-unpredictable world of the stock market.
Cost-Effective Strategy:
For those looking to gain exposure to a bullish move in a stock without a hefty capital outlay, call debit spreads are an attractive choice. This strategy is more capital-efficient compared to outright buying a call option, making it accessible to a broader range of traders.
Time Decay Mitigation:
Time decay, represented by theta, can erode the value of options over time. Call debit spreads, however, mitigate the impact of time decay compared to buying standalone call options. This characteristic allows traders to weather the passage of time more effectively.
Profit from Moderate Moves:
Unlike the all-or-nothing nature of buying a call option, call debit spreads can be profitable even in the face of moderate price increases. This flexibility allows traders to adopt a more nuanced approach, aligning with their market outlook and risk tolerance.
Benefit from Low Volatility:
Call debit spreads shine not only in bullish markets but also in low-volatility environments. Balancing the impact of volatility by simultaneously buying and selling options, this strategy proves its mettle across various market conditions.
Flexibility with Strike Prices:
Traders can tailor call debit spreads to their specific market outlook by selecting different strike prices. This flexibility enables strategic positioning based on technical analysis, overall market sentiment, or other factors influencing stock movement.
Trade Management Opportunities:
Call debit spreads offer opportunities for adjustments based on market dynamics. If the underlying stock experiences a substantial move in your favor, you can choose to close the spread early for a partial profit or roll it to a higher strike for potentially greater gains.
Downside Protection:
While the primary goal of call debit spreads is to capitalize on upward price movements, they inherently provide a level of downside protection. The defined risk nature of the strategy ensures that losses are contained in case the trade doesn’t unfold as initially anticipated.
Here is the profit profile for a call debit spread on ETN which we recently closed out for 101% profit
You can make incredible profits trading call debit spreads all while staying fully hedged.
CFU RESULTS FROM LAST WEEK:
- These are profits we locked up from the week ending February 2nd:
- ADI 11%
- AMZN 153% (in 2 days)
- AMZN 87% (COMMON STOCK)
- AMZN 91%
- BA 76%
- COIN 82%
- COIN 87%
- CROX 90%
- CVX 62%
- ETN 101%
- EW 28%
- GOOGL 76%
- META 100%
- MMM 99%
- SBUX 99% (in 2 days)
- SMCI 96%
- SOFI 91%
- SQ 99%
- TSLA 50% (in less than 3 hrs)
- TSLA 79%
- TSLA 89%
- TSLA 99%
- TSLA 100%
- TSLA 100%
CFU Member Results:
CLOSED AND REALIZED PROFITS 💰
Our community is fiercely focused on booking you monthly profits.
We are currently not accepting new enrollments but be sure to keep an eye on joincfu.com for alerts when we open the doors for more members to join us.
Stephen
President, CFU
