4 Great Ways To Get Money From Your Stock
There are a lot of different methods to make money from a stock. While finding great stocks that are sure to go up is important you can still make a lot of money even if a stock that you own stays flat. So, what are these 4 different ways of making money from a stock that you already own?
1. Dividends
Dividend paying stocks put out a nice cash flow which in turn helps you to increase your returns. When a company wants to share their earnings with their stock holders they can issue a dividends and pay each holder a percentage of their earnings.
Some professional investors will consider this the most powerful method of making money because it pays out consistently. However dividends are not the only way to make money off of a stock that you already own.
2. Capital Appreciation
This is an easy concept to understand, if you buy a stock for $40 and it goes up to $60 you can sell it and keep the difference. Appreciation can be the single biggest way to make money off of a stock if you get into the right one. That is why checking a stocks fundamentals and technicals can be so important.
3. Covered Calls
Writing covered call is another way of profiting in the stock market. If you sell a covered call you are selling someone else the right to buy the stock from you at a certain price on or before a certain date.
This may force you to get out of a position early, but can be very powerful if you do it right.
4. Selling puts
One very underused method of making money is called selling put options. It can help an investor start to make money even before they enter a stock. By selling a put you are letting someone else sell you a stock at a certain price sometime in the near future.
As long as you are willing and able to get into the stock at that predetermined price it can be very profitable.
