The MVP Stock Strategy invests in stocks that are in the Chuck Hughes Trend Line Plan 'buy ' mode with trend corroboration of a new 52-Week High or price level confirmation. Historical and real profit results demonstrate this mixture of secrets produces a powerful investing force that identifies stocks with the greatest potential profit. I also use this fusion of methods to take a position in call options on MVP Trend Line Stocks. The MVP Stock Method has clearly defined buy and sell rules that can be used to purchase and sell call options on MVP Trend Line Stocks.
MVP Option System Rules
1. Buy a call option on a stock if its 40-Day Weighted Trend Line (WTL) is above the 80-Day WTL
2. Sell any option if its underlying stock's 40-Day WTL crosses below the 80-Day WTL or on option expiration day whichever comes first
When I compare investing utilising the MVP Stock Technique to other traditional stock methods, MVP walks away as the obvious winner! But the MVP Option System can be far more profitable. I know about now you are thinking about, "Why risk investing in options when I am able to receive a good return investing in stocks? Why go out on a limb, why push it? Why options?" This is why: Investing utilizing the MVP Trend Line Option Strategy can offer wonderful returns. Yes, this is the way the serious money can be made. This is the way in which the 'late out of the gate ' investor can make up for lost time. While investing utilizing the MVP Trend Line Option Strategy can supply a much bigger return than investing using the MVP Trend Line Stock Method, option investing also carries greater risk so it is important to comprehend the hazards involved with option investing.
"Don't be scared to go out on a limb. That is where the fruit is."
- H. Jackson Browne
The greater return potential linked with options is due to the leverage that options provide. Let's take a look at some precise option examples so that you can understand the critical concept of leverage and how leverage can provide a heavy rate of return. The option quote table that follows contains exact call option costs (courtesy of Yahoo Finance) for Hewlett Packard (HPQ). Buying call options is a bullish system as the value of a call option will increase as the price of the basic stock increases. Hewlett Packard stock is presently trading at 32.78. Let's focus on the March 35-Strike call option (circled).
10% Share Price Increase = 950% Option Return
Purchasing the 35-Strike call option gives us the inherent right to buy 100 shares of HPQ at 35.00. If we were to buy the 35-Strike call option we'd expect to pay the 'ask ' price of .10 cents or $10 per option (.10 x 100 shares = $10). Let's assume HPQ stock increases 10% in price from the prevailing cost of 32.78 to 36.05 (not a peculiar assumption as HPQ stock has increased more than 60% during the last year). With a share price of 36.05 the 35-Strike call option would be worth 1.05 points or $105 (stock price of 36.05 minus 35-Strike price = 1.05 option value). When you purchase options you can sell them anytime before option expiration. So the option we purchased for .10 points may be sold for 1.05 points. Selling the 35-Strike call at 1.05 would produce a 950% return (1.05 sale price minus .10 cost = .95 profit divided by .10 cost = 950% return).
The Power of Leverage
The table below compares the potential profit of buying Hewlett Packard stock at today's price of 32.78 versus the HPQ March 35-strike call option at .10 points. If HPQ stock increases to 38.00 stock speculators realize a 15.9% return but option speculators realize a 2900% return. If HPQ stock increases to 40 stock stockholders realize a 22% return but option financiers realize a 4900% return.
Provident Supposition
I would like to make one important distinction between the leveraged investments we use with the MVP Option Strategies vs 'high risk ' leveraged investments. All of the Chuck Hughes MVP Option Methods use 'limited risk ' leverage. This suggests that the most you can lose is your initial investment. Irrespective of unfavourable. Market moves you can't lose more than your initial investment. You won't receive a 'margin call ' from your broker or be asked to add funds to your brokerage account to bypass the forced liquidation of your positions.
MVP Option System Rules
1. Buy a call option on a stock if its 40-Day Weighted Trend Line (WTL) is above the 80-Day WTL
2. Sell any option if its underlying stock's 40-Day WTL crosses below the 80-Day WTL or on option expiration day whichever comes first
When I compare investing utilising the MVP Stock Technique to other traditional stock methods, MVP walks away as the obvious winner! But the MVP Option System can be far more profitable. I know about now you are thinking about, "Why risk investing in options when I am able to receive a good return investing in stocks? Why go out on a limb, why push it? Why options?" This is why: Investing utilizing the MVP Trend Line Option Strategy can offer wonderful returns. Yes, this is the way the serious money can be made. This is the way in which the 'late out of the gate ' investor can make up for lost time. While investing utilizing the MVP Trend Line Option Strategy can supply a much bigger return than investing using the MVP Trend Line Stock Method, option investing also carries greater risk so it is important to comprehend the hazards involved with option investing.
"Don't be scared to go out on a limb. That is where the fruit is."
- H. Jackson Browne
The greater return potential linked with options is due to the leverage that options provide. Let's take a look at some precise option examples so that you can understand the critical concept of leverage and how leverage can provide a heavy rate of return. The option quote table that follows contains exact call option costs (courtesy of Yahoo Finance) for Hewlett Packard (HPQ). Buying call options is a bullish system as the value of a call option will increase as the price of the basic stock increases. Hewlett Packard stock is presently trading at 32.78. Let's focus on the March 35-Strike call option (circled).
10% Share Price Increase = 950% Option Return
Purchasing the 35-Strike call option gives us the inherent right to buy 100 shares of HPQ at 35.00. If we were to buy the 35-Strike call option we'd expect to pay the 'ask ' price of .10 cents or $10 per option (.10 x 100 shares = $10). Let's assume HPQ stock increases 10% in price from the prevailing cost of 32.78 to 36.05 (not a peculiar assumption as HPQ stock has increased more than 60% during the last year). With a share price of 36.05 the 35-Strike call option would be worth 1.05 points or $105 (stock price of 36.05 minus 35-Strike price = 1.05 option value). When you purchase options you can sell them anytime before option expiration. So the option we purchased for .10 points may be sold for 1.05 points. Selling the 35-Strike call at 1.05 would produce a 950% return (1.05 sale price minus .10 cost = .95 profit divided by .10 cost = 950% return).
The Power of Leverage
The table below compares the potential profit of buying Hewlett Packard stock at today's price of 32.78 versus the HPQ March 35-strike call option at .10 points. If HPQ stock increases to 38.00 stock speculators realize a 15.9% return but option speculators realize a 2900% return. If HPQ stock increases to 40 stock stockholders realize a 22% return but option financiers realize a 4900% return.
Provident Supposition
I would like to make one important distinction between the leveraged investments we use with the MVP Option Strategies vs 'high risk ' leveraged investments. All of the Chuck Hughes MVP Option Methods use 'limited risk ' leverage. This suggests that the most you can lose is your initial investment. Irrespective of unfavourable. Market moves you can't lose more than your initial investment. You won't receive a 'margin call ' from your broker or be asked to add funds to your brokerage account to bypass the forced liquidation of your positions.
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