National Grid shares are a classic defensive investment. We all still need electricity and gas. And so that makes the shares perfect for these uncertain times and the Revolution strategy.
In this video, Greg shows you how to sell a cash-secured put on National Grid shares. The sale brings in an annualised yield of 21.3% AND builds in 8.0% of downside protection.
In other words, you get paid for the obligation to buy National Grid shares at a price considerably below their current price if they take a tumble. But you will only lose money if they are down by more than 8.0% in the next 37 days!
As always, this is an example of what’s possible, not a recommendation.
Selling cash-secured puts is a great way to generate income using a stock you would like to own. It is a straightforward transaction to sell a put online and immediately bank the premium. In return, you are obligated to buy the shares at the agreed price if the holder of the put exercises it within the agreed time frame. And as you can see from the example with National Grid, that allows you to also build in quite a larger downside buffer.
If you want to learn more, click here.
Third Friday Ltd are not regulated by the Financial Conduct Authority and the FIRE Revolution training programme is purely educational in nature. Under no circumstances do we provide any financial trading or investment advice. Any examples used are for educational purposes only and should never be construed as advice. We accept no responsibility for any investment losses you may incur. Please consult a financial advisor or other qualified professional if you are in any doubt as to the suitability of the strategies we teach.