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For weeks now, I've been banging the drum, trying to let you know about what could be the year's biggest opportunity to reap huge profits.
I detailed how the Fed's rate hikes and the threat of a coming recession will propel the price of gold higher...
We've talked about how the weakening of the U.S. dollar, as well as rising inflation and waning investor confidence also historically drive up gold, silver and other precious metals.
And most recently, I showed you how the debt ceiling crisis is the latest catalyst that could kickstart the massive gold breakout I'm predicting.
With the latest round of negotiations looking more and more like they'll stall out, the drop in the stock market and flight to safety in assets like gold could be just days away.
Sure, you could just buy gold and silver securities like SPDR Gold Shares (GLD) and iShares Silver Trust (SLV). Stocks like those are great assets to own these days.
But I've got a better way to trade this opportunity that will not only allow you to collect income just for entering a trade, but also gives you the opportunity to buy gold and silver stocks at well below their current value.
Let me show you how...
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While the price of gold has risen significantly since the start of the new year, as you can see, it's not something that happens in a straight line...
As with any stock, the idea is to buy low and sell high. The difficulty comes in knowing whether you're buying gold as it is surging upward, or you're topping the stock and will be stuck with a losing position until the price is able to rally back above the price you paid.
But what if I told you that there's a way to ensure that you were buying shares at a significant discount, at a point where prices are likely to rally, and make money just for doing so?
I know, it almost sounds too good to be true, but that's the beauty of selling put options.
Let me explain...
Even a novice options trader likely has experience in buying put options.
Buying a put option is like buying insurance.
Owning a put option gives you the right to sell a stock at a particular price. For example, if XYZ is trading at $50, you could buy a $50 put that gives you the right to sell XYZ at $50. Should XYZ drop to $40, you could exercise your right to sell XYZ at $50 - just like an insurance policy.
Of course, buying an insurance policy costs money - and so does a put option. The cost of a put option is called the premium.
And remember: If someone has the right to sell, then there has to be someone else who has the obligation to buy.
In the options world, you can take the role of the insurance company by sellingpu…
About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.