Knowing how to double your money - and do it consistently - is the Holy Grail every investor seeks.
Many financial advisers will say they know how to double your money, but it doesn't turn out that way. Instead, they enrich themselves at your expense by charging a lot of fees and commissions.
That's not how it works at Money Morning. All of the articles on this website are free. And we have several sister sites and services that also offer free investing insights and advice.
One of those free services - Options Strategist Tom Gentile's Power Profit Trades - finds trades every week that can double your money.
"As a trader, I'm only looking for opportunities to double my money or more," Gentile said. "If I can't make 100% on a quick trade, it's really not worth my time. And it shouldn't be worth your time, either."
Let's be clear. Gentile's methods for how to double your money do not use a conventional "buy-and-hold" strategy. And while it involves stocks, most of the time you never actually buy or own any shares...
That's because Gentile's method uses options as well as his proprietary stock-tracking system.
He's able to deliver such large gains because of how he uses options to magnify the routine moves of stock prices.
What Are Options? Options are simply contracts that come in two basic flavors, puts and calls. Each contract is for 100 shares.
A call option gives the contract buyer the right to buy the named stock at a specified price (the strike price) for a set period of time. A put option gives the contract buyer the right to sell the named stock at a specified price for a set period of time. The value of the contract changes in response to the underlying stock price.
If the option is not exercised by the expiration date of the contract, or if the stock moves opposite of the desired direction, the buyer loses his investment. The contract buyer also can sell the contract to someone else.
"It's a fact that share prices move up and down on a regular basis, but what most people don't know is that with options you can turn these little moves - even the smallest move in share prices - into an easy double," Gentile said.
Gentile's strategy is to buy and sell the contracts, profiting from their increase in price, not the price of the underlying stock. In the case of a call, he buys a contract expecting the underlying stock price to move up.
When the stock price increases, so does the price of the option contract. It's easier to notch big gains with options because 1) they cost much less than the stock, and 2) they have an expiration date.
"The key thing to focus on with options is they expire, so you want to trade an option knowing the anticipated price run of the stock and what date - or in what time frame - this price run should happen," Gentile said.
And that's where the proprietary part of Gentile's strategy comes in...
To guide the timing of options contract purchases, Gentile has developed something he calls the "Money Calendar."
The Money Calendar crunches hundreds of thousands of data points on a stock to reveal a 10-year track record. Gentile's system uses that information to predict what direction a given stock will move, and by how much, over the next 27 days.
"I have a suite of tools that allows me to zero in on a stock's share price not only to find how high it moves... but when it moves and how long that move lasts. I use these tools every trading day of the week to double my money," Gentile said.
Let's look at an example to see why Gentile's system is such an effective way to double your money.
In late April, Gentile's Money Calendar alerted him to a possible move to upside in Apple Inc. (Nasdaq: AAPL).
So he bought a $4 call option for $400 that gave him the right to buy 100 AAPL shares at $125 a share. Adding in the commission, his total outlay was $414.95.
Had Gentile instead bought 100 shares Apple stock, he would have needed $12,500.
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A few weeks later, on May 22, the Apple stock had risen by $3.92. But the call option had risen to $8, making the contract worth $800. That's a clean 100% gain. Meanwhile, a person who had bought AAPL stock would have been up just 3%.
Obviously, Gentile's strategy is not risk-free. And some trades return less than 100%. But others do much better. Over the past six months, Gentile has come up with trades that recorded gains of 201%, 245%, 328%, and 580%.
"I show people what day they can expect the stock price to jump, by how much, and for how long," Gentile said.
If you want to learn how to double your money - and then some - Power Profit Trades is the best place to start.
Follow me on Twitter @DavidGZeiler.
