Cash Flow From Holding a Stock

Did you know that you could get cash flow simply buy holding a stock? It's true; In fact there are a few ways which investors can make a decent income from the stock market by simply buying and holding stocks. These are.

1. Dividends

Of course when you own a stock that is paying off a dividend you are automatically making money month after month. You take on no additional risk by collecting it and instead can just sit back and make passive income until you sell the stock.

2. Covered Calls

Covered calls will have much higher payouts then dividends, but you also take on much more risk. Instead of making money by simply holding the stock you have to sell something called a call option.

Call options give you the obligation to sell your stock at some point in the future at a specific strike price on or before a given date in the future. That means that you are taking on the risk of getting called out, on the other hand, if the stock stays below that strike price by the expiration date you should not be called out and you will be able to sell another call at some point in The future.

3. Selling Puts

Another interesting way to make money from your long term investment is to sell puts. This is pretty much a 1 time payment that you receive in order to take on the obligation to get into a position at a specific price.

So in other words it can be a perfect way to make money as you enter your stock. Selling puts before you enter a trade lets you start off ahead.

These ways allow you to make passive income from the stock market, and as the stock itself appreciates that can be another way to make a profit.

Source by Shaun Rosenberg

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