Carla Pasternak's Premiere Issue of High-Yield International Just Released!
Don't miss out on the most generous yields in a generation -- we're talking about stocks yielding as much as 21.1%. Income expert Carla Pasternak's debut issue of High-Yield International covers a Taiwanese manufacturer yielding 11%... a rare Mexican monopoly yielding 12.7%... and other top-performing investments yielding up to 21.1%. Carla Made the Leap Abroad, Find Out Why Should Too!

Just One Stock Every Month is All You'll Ever Need
Buffett recently claimed that diversification doesn't make much sense. This sort of thinking is why we've recently taken this "Keep it Simple" approach. Just one pick per month. In fact, expert analyst Amy Calistri has already put this technique to the test. She is up +22% in this bear market.
Click here to get her latest pick now.




Government's Biofuel Timetable Could Spell +15,900% Growth

+15,900% growth might seem far-fetched... but it's not. In fact, it is mandated by law. And I've identified the ONLY stock positioned to capture this growth. Visit this link to watch the video and learn more.
 


Get the Monthly Payments You Need With This 9.5%-Yielder
During the market turmoil of the past year, this stock has been our haven. Through thick and thin it has never failed to pay us the same juicy dividend every month. (Currently it yields a nice 9.5%.) Also, while the market seesawed, this stock held steady. Over the last year it's outperformed the S&P 500 by more than +43%! So if you're looking to beat the market, and secure a reliable monthly income stream, then you need to take a look at this stock. Go here to get the details.

Seven “Yield Doubler” Stocks That Are Clobbering The Dow
Just 12 trading days before the market hit its 6,500-point low this year, the “Yield Doublers” portfolio was born. That was 4 months ago. The Dow has rebounded +12% since then -- but our seven “Yield Doublers” have clobbered that figure by a factor of up to 9-to-1… delivering up to +144.2% gains to boot! Go here to see why you should add these “Yield Doublers” to your portfolio today. Go here to see why you should add these “Yield Doublers” to your portfolio today.

Find Out Which of the Rarest Securities on Earth Carries An Average 17.2% Dividend Yield
Knock-out returns are available from a rare security that combines stocks and bonds. Grow $10,000 into $35,598 -- or even $25,000 into $88,994! There are only eight of these securities in the world. Learn more by clicking here!


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Important Updates for Investors

Carla Pasternak's Premiere Issue of High-Yield International Just Released
Income expert Carla Pasternak's debut issue of High-Yield International covers a Taiwanese manufacturer yielding 9.5%... a rare Mexican monopoly yielding 13.4%... and other top-performing investments yielding up to 19.0%.
 

Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it is mandated by law. And I've identified the ONLY stock positioned to capture this growth.

The Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income investors. This massive spending, combined with movement out of U.S. Treasuries, is going to take its toll on the dollar, and international income investors could reap the rewards in the form of higher dividends.



USING OPTIONS AS EQUITY SURROGATES


In teaching T.D. Waterhouse stock market courses, I’ve become aware that traders often have misconceptions about options.

Individuals who are quick to buy penny stocks regard them as extremely risky and state that "I would never buy options." Some traders, on the other hand, become addicted to options and don’t consider buying the underlying stock even when it is very affordable.

Every so often in this newsletter I will recommend purchasing an equity option as a possible alternative to buying an underlying stock. In previous newsletters, I have recommended options on United Technologies (UTX), Avon Products (AVP) and 3M (MMM). What these securities have in common is that, at least from my point of view, they are all "expensive" stocks.

Avon and United Technologies both trade at around $60 a share and MMM is close to $130. Unless a trader has a very large portfolio, it is difficult to trade these types of stocks in sufficient quantity to make a reasonable profit. This problem can be solved by buying options instead of the underlying stock. I often describe this strategy as treating the option as an "equity surrogate."

What is an option? Please skip this description of basic ideas if you are already familiar with options. If not, read on.

Options can be divided into two categories: calls and puts. Call options give the owner the right to PURCHASE an underlying stock, while put options give their owner the right to SELL an underlying stock. Individual investors generally purchase call options on a stock they believe will increase in value, and put options on stocks they believe will decrease in value.

In more specific terms, a single call option contract gives its owner the right, but not the obligation, to purchase 100 shares of an underlying stock at a specific price on or before a specific date. The specific price is called the "strike" price. The specific time is specified by the particular contract you buy. In my strategy I always purchase options that are not set to expire for at least a few months, so right now I am purchasing October options. All standard equity options contracts always expire the third Friday of each month.

On or before expiration, you can exercise your options. If you bought call options, you can take delivery of the underlying stock. More typically, options are traded before they expire. Even if you buy options that expire in October, you can sell them the next day -- or the next minute -- if you so choose.

I have continually pinpointed 3M Company (MMM) in my "Stocks to Watch" section. The shares fell sharply after being downgraded on Wednesday, April 16th, breaking at $130. The stock then rebounded on Thursday, closing at $129.98.

Let's say that you considered MMM an attractive candidate to buy, but purchasing even 100 shares at just below $13,000 would crimp your ability to take other positions. You could instead buy options on this particular stock.

There are many places to get option quotes on the net. One of the most flexible is http://finance.yahoo.com
After you enter the site, enter the symbol for the underlying stock you are interested in viewing options quotes on. Double click on "Options" and you will be able to view options screens for calls and puts in various time frames.

A very wise trader once told me this about options -- "Buy more time than you think you'll ever need." At first, I resisted his advice, but soon found out it was true. Typically, I like to buy five or six months of time. The cost per option is higher using this approach; however, you can at first be wrong on the direction of the underlying stock and still make money if it moves in your direction over time. I also like to buy options one strike price above where the stock is currently trading. With MMM at just about $130, I focused on the October $135 call. The bid and ask at the close of trading on Thursday, April 17th was $5.60-$5.90.

One of the key advantages of buying options is leverage -- or the ability to dramatically increase your rate of return while investing far less capital than the alternative -- buying or shorting the actual underlying stock. Let’s say you were weighing buying 100 shares of MMM versus buying several option contracts.

Let's say MMM opens at $130 and you buy 100 shares of the stock there. Several days later it rallies back to $135 and you sell. Your profit would be $500 on a $13,500 investment, or +3.7%.

Now let's say you used call options instead by purchasing five MMM October 135 contracts. You pay the full asking price of $5.90. To calculate the total cost of this option, multiply the $5.90 ask price by 100 (remember: each contract represents 100 underlying shares). Each option therefore costs $590, requiring you to make an initial investment of just $2,950 ($5.90 x 100 x 5).

Now let's say MMM goes up to $135 and does so in the next few weeks. My best guess is that the 135 calls would then trade at approximately $8.00 bid / $8.40 ask. Let’s say, then, that you sell at $8.00. Since you bought at $5.90 and sold at $8.00, your profit is $2.10 per contract, or a total of $1,050. In absolute terms this is certainly better than the $500 you would have made by holding the stock. Meanwhile, on a percentage basis you have done INCREDIBLY better. An investment of $2,950 ($5.90 times 5 contracts) has yielded $1,050 in profit for a quick return of nearly +36%!

Are there disadvantages to options? Most definitely. First, options are a "wasting" asset. As they move closer and closer to expiration, their value decreases at an increasing rate. Also, they lose most in percentage terms within the last month of their life. That is the reason I generally avoid "short fuse" options with little time remaining before expiration.

Second, it is important to be aware that almost always in trading options you will need to buy at the ask and sell at the bid. If you were to buy the October 135 MMM contract at the present time, then you would almost certainly pay $5.90. If you changed your mind and decided to sell two minutes later, then you would probably have to settle for $5.60.

The 30-cent spread is far greater than anything you would encounter on even a low-priced stock. This spread means you must be very right when you make an options trade. If the stock just stands still, then you won't break even -- you will likely lose money.

As I stated above, when a particular stock trades at a reasonably low price (for me, below about $40), I usually do not use options. However, options extend the range of stocks I can trade. For me, that extension of the range of choice is an important benefit. Options, so to speak, give me options I wouldn't otherwise have had.


 

Who Cares What the Market is Doing When You're Pulling in $28,900 a Year in Dividends?
With the safe, growing, high-yield picks that Editor Carla Pasternak recommends every month you don't have to worry whether or not the market has bottomed. You can sit back and collect annual dividend paychecks of $16,300, $19,900 or even $28,900! You can't go wrong looking into Carla's recommendations. A year from now, when you've collected as much as $28,900 from dividends alone you'll be glad you did. Take the first step and, read this report now.


Seven "Yield Doubler" Stocks That Are Clobbering The Dow
Just 12 trading days before the market hit its 6,500-point low this year, the "Yield Doublers" portfolio was born. That was almost 4 months ago. The Dow has rebounded +12% since then -- but our seven "Yield Doublers" have clobbered that figure by a factor of up to 9-to-1... delivering up to +144.2% gains to boot! Go here to see why you should add these "Yield Doublers" to your portfolio today.



We're Putting $50,000 on the Line in Our NEW Stock of the Month Portfolio
We're SO confident in this strategy that we're putting our money where our mouth is... $50,000 worth of it in fact! That's how much we've put into a brokerage account to fund the real-money portfolio for StreetAuthority Stock of the Month. Amy Calistri just made her first purchase, and it's not too late for you to join in and follow along with everything she does. Don't be left on the sidelines, click here to learn more now.


Two Infrastructure Stocks That Are Profiting From Massive Government Spending
Since the stimulus package was signed into law on February 17th, these two infrastructure picks have moved up quickly. One's a worldwide construction company that's already gained +32% to date. The other makes critical copper, aluminum and fiber optic cables... and shot up +41% in a matter of just weeks. Both are headed higher. You’ll find their names in this special report.




6 Free Months of Bernie Schaeffer's Option Advisor
Learn the secrets of successful options trading from top trader, Bernie Schaeffer. Start your free 6-month subscription to The Option Advisor newsletter now and get free online access to Bernie's Crash Course in Top Gun Trading Techniques.

3 Penny Stocks Poised to Soar 300%
By the time Wall Street notices the 3 picks revealed in this report, you could be sitting on a fortune.  Click here to get immediate access to an exclusive Free report -- "3 Underground Penny Stocks Poised to Soar."

 

Investor's Business Daily (IBD)
Get 10 Free Issues of Investor's Business Daily (IBD) – Plus 2 Free Weeks of Investors.com

52 Wins in 52 Weeks - 365 Days Without A Loss
Success Trading Group scored 52 wins in 52 weeks! Get their weekend newsletters free and register for Success Trading Group's next stock picks free for 30 days!

 

Investing Doesn't Get Any Easier Than This

Stock picker Amy Calistri's strategy is as simple as investing gets -- just one idea a month designed to make money in today's market. Invest this way and you don't have to worry about oil prices, automaker bailouts, or what the Fed is up to -- because every "bad" economic development actually helps some investment or another.Your investing life can get a lot simpler -- starting today.
Go here to learn about Amy's simple investing strategy.
 


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