The Bull Hunters Guide

I released the original version of The Bullhunters Guide To The US Stock Market in December 2006. There were 1600 downloads within a matter of weeks. As of today, there have been 3770 downloads. The Bullhunters Guide has officially made Bronze status in the best seller stakes (just kidding. I’ve got no clue what that means)

I am officially over halfway through the new version of The Bullhunters Guide. This time it will include more indepth trading information about options, covered calls and more advanced strategies. Increasing your monthly cashflow by renting shares is one topic. I’m hoping this will shed more light on the US stock market for everyday people. Of course the strategies apply to most stock markets around the world. The bigger markets are just more suitable due to the liquidity of the stocks.

2007 has been kind to me. The Bulls have had a Run on the market and I haven’t needed to focus too much on Bearish Strategies. I will talk more about those strategies in the next book. Stay posted and I will keep you updated about the release date for the bigger and better version of The Bullhunters Guide To The US Stock Market – Due for release December 2007. Oh Yeah! It’s free too. Of course!

Go the Bulls!

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2007

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I am going straight into another excerpt from The Bullhunters Guide to the US Stock Market today discussing the renting shares or more commonly known as the Covered Calls strategy.


Covered Calls - Renting Shares

Say your Grandma left you 10,000 shares of Microsoft. You held it for a few years and the stock basically did nothing. Microsoft doesn’t pay a very good dividend so you consider selling some of the stock to get some cash. But instead your broker recommends that you write covered calls. You say… What…

By writing a call you are selling an option on your stock. An option gives its owner the right, but not the obligation, to take action. In the case of calls, it gives the holder of an option contract the right to buy 100 shares of Microsoft at $30.00 per share any time between now and November.

Just as with stocks, you don’t really sell an option contract directly to another investor, but instead to a market or specialist. He then sells the contracts to individual investors who want them. Of course there is a spread between the bid and ask of an options contract as well.

Keeping with the Microsoft example, you could sell the contract mentioned above with a strike price of $30, expiration in November for $0.05 a share. Since each contract is for 100 shares, this would equal $5. That’s not a lot of money so you decide to sell 100 contracts, which covers all $10,000 of your shares (100 contracts*100 shares each). In this case you get $500 no matter what. Microsoft’s current stock price is $28.37 but if it reaches $30 or more, your contracts will probably be exercised. This means that you will be obligated to sell all 10,000 shares for $30 each - even if they reach $35, $50 or $100 per share. If instead the stock stays around $28.37, goes down or goes up but not to $30, the options you sold will go unexercised. In this case, you will keep the $500 and all of your shares.

When you write calls for which you own the underlying stock, they are said to be covered calls. In this example you owned 10,000 shares of Microsoft so you could write 100 covered call contracts. If the contracts were exercised, you had the stock to sell.

A more aggressive (and very dangerous) strategy is writing naked calls which is when you sell contracts for the stocks that you don’t have. If the contracts get exercised, it’s up to you to go out in the open market and buy the stock.


Trading for Cashflow

In the above excerpt, remember that Sean wrote the eBook last year so the prices and months that he mentions is because of this reason. This is only a brief summary of the renting shares strategy and it is a great one to use when you are trading for cashflow. Remember that with any new strategy that you take on , it is wise to paper trade for a minimum of three months until you get the hang of how it all works.

Many of you requested that Sean put some real live renting share trades in his next eBook as you are eager to learn the strategy. This Sharelord® strategy will be discussed in more detail in the next installment to the Bullhunters Guide. I trust that the articles here are of use for you in your endeavour to master the US stock market.

To Your Success

Angela Recchia
Graduate Support
Universal Wealth Creation © 2004 - 2007

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Sean has asked me to join him in writing something here for the Bull Hunters Guide to the US Stock Market blog. So I would like it if you could help me out a bit and let me know what kind of areas I should cover for you.
Obviously we are on the topic of the US Stock Market and trading options, so I want to do my best to bring you relevant information and make it worth your while.

For instance, would you like to have some general thoughts on how to go about choosing stock to buy that would be suitable for the renting shares strategy or writing covered calls as we know them?

I am not a Financial Advisor so I cannot give you specific stocks. These ideas will just be some of the things to look out for on how to choose stocks.

Or perhaps some more talk on mindset and how we can teach ourselves to be emotionally detached from trading on the market? Knowing this is the biggest challenge you will have to overcome.
You may have a specific area that you would like me to cover for you.

Kindly leave your comments for me and I will gladly get back to you with some real juicy info.

Until then…

Angela Recchia
Graduate Support
Universal Wealth Creation © 2004 - 2007

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Universal Wealth Creation is proud to welcome Angela Recchia to the team. She will be helping me provide you with more Articles and improve your Stock Market Research whilst visiting The Bull Hunters Blog.

Angela is a Wealth Graduate of the 21st Century Academy Homestudy Program. She has attended several wealth seminars and is doing one of the key points of getting somewhere in life: Taking Action. Getting involved in blogs and forums makes you active in your learning and it jolts the brain into action.

Angela is also an administrator of the Universal Wealth Creation Forum. Her valuable help allows me to spend more time on research for the next edition of The Bull Hunters Guide to the US Stock Market where I will be going into depth about Renting Shares, better known as Writing Covered Calls.

Just like me, Angela is not licensed to give financial advice. We will both help you as much as we can, however some details we will not be able to disclose due to legal constraints.

Please welcome Angela by posting a warm welcome in the comments section below. Let her know that you appreciate her help.

Regards
Sean Rasmussen
Universal Wealth Creation © 2004 - 2007

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I’ve had lots of feedback via email and in the Bull Hunter Blog. Here are the most common requests so far for the next edition of The Bull Hunters Guide to the US Stock Market

The Most Popular Stock Market Topics were:

1. Real life examples of Renting Shares and Great Cashflow Strategies

2. How to get a greater understanding of puts and calls. Elaborate further on Covered Calls and Writing Puts.

3. Being a Sharelord with real life examples of good and bad trades. Show the “warts & all” of share trading.

4. Cover more options strategies such as collars, strangles & straddles. This would be in a later section of The Bull Hunter for the more advanced readers.

1. More detailed information on the 30 stocks of the Dow Jones Index. We can now begin to get a better understanding of the shares we want to rent out.

2. The workings of US indexes such as eminis or the S&P500. Understanding these indexes will improve us as future investors.

3. Explain the economic clock and how the investment cycle changes. When to enter the market and what market to enter.

4. How to assess what stage we are in the economic cycle.

5. What stock market sectors generally do really well.

6. A separate chapter for Australia and New Zealand and people outside of the US.

7. How to trade the markets from overseas.

8. A section of favorite strategies

Further feedback is needed and greatly appreciated for this book to develop the substance we all need to build a greater understanding of the US Stock Market.

I will volunteer my time to write this book. Your time in the comments section will help me “help you” with my book. Thanks for your feedback and your patronage to my Bull Hunters Blog.

I’ll see you there

Sean Rasmussen
Universal Wealth Creation © 2004 - 2007

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