Did you know you can be paid in cash for simply agreeing to sell a stock you own at a higher price?
And did you know you can collect that cash almost immediately — usually within about eight minutes of agreeing to sell your shares?
It’s true. This cash-generating transaction is available to just about every investor on the planet, yet very few actually use it — even though this systematic approach to profits is deemed so safe by the SEC that you can use it in your IRA retirement account.
Research firm Value Line says this strategy is “ideal for retirement accounts such as IRAs, since [it] offer[s] income and protection.”
Institutional investors use this strategy all the time to lower their risk and improve their returns.
But for some reason, individual investors almost never use it, even though it’s very simple, takes very little time, and is available to anyone who wants it.
Millions of these transactions take place every single day. It’s a tried and true strategy for generating cash from stock you own.
You may be wondering how much money we’re talking about. After all, if it’s just a few dollars, it may just not be worth your time…
Well, the fact is, when you agree to sell your stock for a higher price, you can take in as much as 10% of the share price — in cash, and right away. And if you end up selling the stock at a higher price, you’ll keep that profit, too.
And here’s the thing that makes this type of transaction really special: Just because you agree to sell the stock doesn’t mean you will. You will still take in as much as 10% (sometimes more) for agreeing to sell, but if the stock doesn’t move higher to the price at which you agreed sell, you keep the stock and the cash from the sale agreement.
Guess what you do then? Why, you enter another agreement to sell you shares at a higher price and take in more cash. That 10% you just made has now doubled to 20%… and there is no legal limit to how many times you can do this.
Now, let me show you a couple of real examples that demonstrate how easy this type of transaction is…
The Easiest 17% You Can Make
In the first example, I’m going to show how a group of investors used the strategy I’ve described to make a 17% gain in about four months.
Before I go on, let me say I realize 17% may not sound like much. There are plenty of stocks you could have bought a couple months ago that have gone up more than 17% today.
Problem is, there are a lot of stocks that are 17% lower than they were a few months ago, too. How do you know the difference between a winner and a loser? And more importantly, do you really just want to take the loss if you buy a loser?
The fact is it is next to impossible to be 100% certain that a stock you just bought is going to move higher. Sometimes they do, sometimes they don’t.
So the thing about the 17% gain I just mentioned is that it is lower risk than regular buy-and-hold investing. That’s because these investors took some of their profits immediately upon agreeing to sell the stock at a higher price.
I expect if you could take 10% in cash right off the top of every stock you bought, it would make investing better.
Now let me show you what I mean…
A few months ago, I recommended an oil and gas stock to a group of individual investors just like you. Shares were $12.06 a piece, so 1,000 shares cost $12,060.
Then these investors immediately agreed to sell those shares at $13 and were paid $700 in cash — deposited into their brokerage accounts right away, in just a matter of minutes. And it was theirs to keep and spend however they wanted.
After a few weeks, they had the opportunity to end their agreement to sell the stock at much lower price. So for just $250, they ended their agreement to sell the stock at $13.
So far, the net profit was $450 — $700 for the initial agreement minus the $250 they paid to get out of it leaves a total of $450.
Do you know what they did next? They entered into another agreement to sell their shares at $13 and were paid another $600!
Add that $600 to the original $450 they were paid, and it’s $1,050 in cash. All for simply agreeing to sell their stock at a higher price than they paid for it.
This time around, these investors ended up selling the stock at $13. That was a $940 profit from the original price. Add in the $1,050 in cash they took, and the total profit was $1,990 in just a few months.
Here’s another example of this powerful income strategy in action…
$1,600 in Income from an $8.78 Stock in Less Than Six Months
These individual investors bought a biotech stock for $8.78 a share. 1,000 share lots cost $8,780. Right away, they were paid $1,050 in cash for agreeing to sell those shares at $10. Again, that $1,050 was deposited right into their brokerage accounts, and they could spend it as they pleased.
A month later, these investors had the opportunity to end their agreement to sell at $10. It cost $350 to close the agreement. The net profit was $700.
A month after that, they entered into another agreement to sell the shares at a higher price and were paid $600 in cash.
When they got the opportunity to end that agreement for $250, they jumped at the chance and netted $350. The total cash income was now $1,050 on a stock that cost $8,780. And they weren’t done…
Just a few days later, they entered into a third agreement to sell the shares at a higher price and received yet another cash payment, this time for $750.
When they terminated that agreement for a $200 expense, they netted an additional $550. The total cash income now stands at $1,600.
And the thing is, they still own the stock. That means they can enter into another agreement to sell their shares at a higher price and take in more cash.
They’ve already taken 18% of the original price of the stock in about six months. By the end of this year, their cash income could equal 36% of the price they paid for the stock. There is no limit to the number of times they can do this.
I have several more examples of how these investors — investors no different than you — have generated thousands in immediate cash income just for agreeing to sell a stock they own at a higher price than what they paid.
Now, let me ask you a question: Would you do this? Would you be willing to lock in 10% to 34% gains on every stock you bought just for agreeing to sell it at a higher price a month or two in the future?
There aren’t many win-win situations in the stock market. This is one of them.
Until next time,
Briton Ryle
@BritonRyle on Twitter
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A 21-year veteran of the newsletter business, Briton Ryle is the editor of The Wealth Advisory income stock newsletter, with a focus on top-quality dividend growth stocks and REITs. Briton also manages the Real Income Trader advisory service, where his readers take regular cash payouts using a low-risk covered call option strategy. He is also the managing editor of the Wealth Daily e-letter. To learn more about Briton, click here.
