164. Turn $10,000 into $200,000 in 4 years time by betting on a massive jobs plan by President Trump
With these economic ideas to create 100+ million jobs in 5 years time, as soon as President Trump announces a massive jobs bill, the stock market will go 6-to-10-fold in 10 years time.
We can easily profit from this situation. The stock market will go boom, boom, boom as soon as a 100+ million jobs plan is announced!
As soon as President Trump talks about a 100+ million massive jobs plan, suppose the stock market increases by 50% over 2 years, which is a conservative approach (it may as well double in 2 years time), then you could buy LEAPS call options on the S&P500 ("SPY" ETF, Exchange Traded Fund):
It is September 27th 2019 now:
The SPY stands at a price of $295.40
The at-the-money call LEAPS option on the SPY for 2022-01-21 (or 847 days from now) with strike price of $295 stands at $32.20 ask price, which means 1 LEAPS call costs $3,220. (here is the link on Barchart)
See below for screenshot:
So this means, any increase of the SPY, will amount to almost dollar-by-dollar, increase of this LEAPS call option.
Please note: don't choose this LEAPS call option as I mentioned, in 6 months from now, there will be other LEAPS call options for the SPY. There are always new 2-3 year LEAPS options each several months.
So if the SPY stock (the S&P500) in 2 years from now increases by $150 from $295 to $445, our LEAPS call option becomes priced at $150 (plus time value), so from $32.20 it increases to $150. A 5x fold increase of your investment if the stock market increases very conservatively by 50% in 2 years time (or 25% per year)!
Please note, this LEAPS call option has still time value in 2 years from now, we don't sell at expiration of this option so it still has months of time value, therefore it is higher priced when you sell it. This is the farest LEAPS call option on the SPY at this time of writing. Choose your own LEAPS call option on the SPY, preferably the farest, most months to go when you buy one.
So if you would invest $10,000 (like these are 3 LEAPS calls at $32.20, costing $3,220 each), it would be worth $50,000 in 2 years from now. If the stock market would double in 2 years from now your $10,000 would be worth $100,000.
Now, if you would sell after 2 years your $50,000 ($40,000 profit), and you invest $40,000 (so you collect your first investment of $10,000) and you buy again 2-year LEAPS call options on the SPY, you could turn your $40,000 into $200,000, 2 years later again, so 4 years later you turned your $10,000 into $200,000 very conservatively.
Your favorite stock may easily beat the index (or S&P500) and grow even faster with LEAPS call options, however the SPY isn't so volatile, and you can just wait and see your investment go 5x fold each 2 years!
Notes:
1. You could loan $10,000 over 5 years with the bank (costing you only $200 per month of payments) if you don't have the money in savings. After 2 years and collecting your first $50,000 thus $40,000 in profit, you pay back the loan with $10,000 so you are safe.
2. Choose an options broker that guarantees your winnings, so avoid the deep discount brokers, like Interactive Brokers (they scammed me in the past), and go for a regular, trustworthy options broker. Even if your commission is $10 or $20 per options contract, you don't care.
3. Take monthly screenshots of your options brokerage account in case your options broker doesn't pay your winnings, you have proof with the screenshots and compare the given options price of the LEAPS with the official options price given by the exchanges each month, to see if the price of the options in your brokerage account matches the price on the exchanges.
4. Don't go for out-of-the-money call LEAPS, choose at-the-money call LEAPS instead. It may be tempting to choose the cheaper out-of-the-money call options as they may give more bang for the buck, but they don't move in tandem with the SPY prices (dollar-by-dollar), it could be frustrating with out-of-the-money options to see them decay when there is no big movement in the stock market.
5. Make no mistake, choose "call" LEAPS options, not "put" LEAPS options when you place your trade, put options are to bet on a down market.
6. The LEAPS call options have a lot of time value, so they decay very slowly. So they appreciate faster with a rising stock market than they depreciate with a bear stock market as the stock market is volatile, it moves up and down. They have "cushion" as it is called.
7. If in doubt, what LEAPS options to buy, ask a knowledgable friend who is familiar with options trading/investing to choose the right call options.
8. Personal taxes apply when you sell your LEAPS call options for profit after 2 years, probably long-term capital gains, they are taxed lower. Ask a tax adviser what the tax rate could be. It could be more tax-friendly if you setup a business, a company for placing your trades, you may get taxed at a lower rate. Take taxes in consideration.
Disclaimer: this article is only for educational purposes, we are not responsible for any profits or losses you could make. Thus trade or invest at your own risk. Also, this investment article is no insiders trading as this website is public information, as well, we don't know if or when President Trump will announce a massive 100+ million jobs bill and as soon as he announces it, everybody knows.
Economic ideas:
