Cabot Profit Booster

Our newest advisory service, Cabot Profit Booster,  provides a weekly recommendation of a high-potential growth stock paired with a covered call (buy-write) for asset appreciation plus low-risk yields as high as 15% each month.

Watch this video to learn more:

 

CABOT PROFIT BOOSTER VIDEO TRANSCRIPT:

[00:00:11] Hi, my name is Jacob Mintz and I’m chief Analyst of Cabot Options Trader, Cabot Options Trader Pro, as well as our new product, Cabot Profit Booster, where we will make money three ways from great growth stocks. [00:00:11][0.0]

[00:00:13] As many people know, the Federal Reserve and central bankers across the globe have driven interest rates to near zero percent. This has created a real problem for traders and investors looking to create yield in their portfolio. [00:00:23][9.4]

[00:00:24] This is a problem. [00:00:24][0.5]

[00:00:26] However, at Cabot, we’ve come up with a solution. We’re going to combine the stock picks of Mike Cintolo, Chief Analyst of Cabot Top 10 Trader, with my covered calls ideas to make money three ways. [00:00:36][10.4]

[00:00:38] First off, a little bit about Mike. Mike is someone who eats, sleeps and dreams about stock charts. And what he does at Cabot Top 10 Trader is recommend to his subscribers the 10 stocks that have the best charts, numbers and stories every Monday evening. [00:00:51][13.1]

[00:00:52] Mike’s recommendations can make money two ways for his subscribers. These stocks can rise in value as well as some of these stocks that he recommends pay dividends. [00:01:00][7.6]

[00:01:02] And the third way Cabot Profit Booster subscribers can profit, is to then then add my covered call ideas on Mike’s stock picks. [00:01:09][6.5]

[00:01:10] I learned about covered calls as a market maker on the floor of the Chicago Board of Options Exchange. So what is a covered call. [00:01:16][6.9]

[00:01:18] First off, covered calls are very basic options strategy a great way for those who have never traded options before to start learning about options and options trading. [00:01:25][7.2]

[00:01:26] When you execute a covered call, you either own or buy a stock and sell a call option on that stock. For every 100 shares of stock you own, you can sell one call. It’s a multiplier of one hundred. [00:01:36][10.3]

[00:01:37] So if you own 500 shares of the stock, you can sell five calls. Again, it’s a multiplier of one hundred. When you sell that call, you collect a premium. So you sell one call for one dollar, you actually collect one hundred dollars. It’s a multiplier of a hundred. So if you sell one call for five dollars, you actually collect five hundred dollars. [00:01:54][17.2]

[00:01:57] So why is this such a popular option strategy for investors? [00:01:59][1.9]

[00:02:00] It’s a great way to create yield against stocks you own. Also, this is a very conservative strategy. Selling covered calls doesn’t increase your risk. In fact, it reduces your cost basis. [00:02:10][9.4]

[00:02:12] So let’s take a look at a covered call I executed on Lattice Semiconductor, symbol LSCC, which is a stock that Mike recently recommended to his Top 10 subscribers. I bought LSCC stock at $19.38. I sold the September 20 call for 64 cents. [00:02:27][14.5]

[00:02:28] Now remember when I sell a call for 64 cents, that 64 cents is actually sixty four dollars. It’s a multiplier of one hundred. That 64 dollars comes into my account. [00:02:38][9.9]

[00:02:40] Now let’s break down the various scenarios of this trade. I bought the stock at 19.38 And sold the call for 64 cents, which reduces my break-even on this stock purchased at 18.74. Remember this a concervative strategy that reduces my break-even on my stock purchase. So in this case, LSC Ccan fall as low as 18.74 and I won’t lose money. [00:03:00][20.0]

[00:03:03] Now let’s move on to a scenario that I refer to as static return. If LSCC doesn’t move for the next month that September 20 call I sold would expire worthless and I would collect that sixty four dollars and create a yield of three point four one percent in one month’s time. We’ve created yield against a stock that hasn’t moved. [00:03:20][17.1]

[00:03:23] The best case scenario for this trade is if LSC rises to 19.99 Or just under the September 20 strike that I sold. In this scenario, we get to keep our stock holding, as well as the stock gains as the stock rose from 19.38 To 19.99 and the call premium. We’ve created a yield of 6.67% In one month’s time. [00:03:42][19.1]

[00:03:44] The worst case scenario for a covered call is where the stock drops dramatically. In this scenario, I would lose money on our stock holding much like as if I owned any stock. However, because I like to call premium, my losses aren’t as bad as I lowered my cost basis. Remember, this is a very conservative risk reducing strategy. [00:04:00][16.1]

[00:04:02] The next area is what I refer to as “covered call return if assigned.” In this scenario, LSCC rises above 20 on September expiration. If this were to happen, the trader who bought the call from me would exercise his right to buy the stock from me and I would not participate in significant upside, should the stock rise dramatically. However, I would have made sixty two dollars in stock rise, as well as sixty four dollars from the call sale. Net net I would have a profit of 6.72% In one month’s time. This would be a great scenario. [00:04:33][30.4]

[00:04:35] So how’d the trade work out for me? The September 20 call that I sold expired worthless and I created a yield of 3.41% in September. Then in October, I sold the October 20 call for 80 cents, and created a yield of 3.2%. [00:04:48][12.5]

[00:04:49] While a yield of 3% in one month’s time doesn’t sound like a home run, in this zero interest rate environment if I can create yields of 3% to as high as 15% each month, these trades, in fact will be home runs. [00:05:01][11.3]

[00:05:03] So what do you get a Cabot Profit Booster? [00:05:04][1.2]

[00:05:05] Every Monday evening Mike will release his Top Ten stock ideas. Then Jacob will find the stock from his list that has the best covered called potential and send you my trade idea Tuesday morning shortly after the market open. [00:05:18][12.4]

[00:05:19] That trade idea will include a portion of Mike’s analysis of the stock, as well as as his full technical analysis, chart, and his stop, which we will be tied to. Then I will break down my trade idea along with the break-even as well as the potential outcomes. [00:05:33][14.5]

[00:05:35] Lastly, I will include a breakdown of our current open positions. And if you have any questions about this trade idea, our open positions, or if you if you are new to options and want to discuss with me how to execute a covered call, you will have access to my personal email. [00:05:49][14.8]

[00:05:51] I’m very excited about this, the awesome potential of profit. I look forward to creating yield, um, great growth stocks in the weeks, months and years to come. Thanks. [00:05:51]