The Protected Equity strategy is aimed at generating substantial capital gains by using leverage from 100% finance, while still having our downside protected. We use a combination of shares and options in this portfolio.

We choose high growth companies that we expect to rise in price, and because we are trading this strategy over a longer time frame, we can ride out any short term volatility or share price weakness.

The beauty is we don’t use any of our own money to buy the shares, and we are protected from any fall in price – we have insurance which guarantees we can’t lose money from a share price drop. All we need to do is pay for the insurance upfront (just like you do when you insure your car or anything else) and we are fully protected.

In fact, if the share does drop, our insurance goes up in value, so we can still make a profit. And we still get all the profits from a rise in the share price, and all the dividends along the way – even though we often haven’t paid anything for the shares in the first place. All in all, a wonderful medium-long term strategy that has limited downside risk, but huge upside potential.

We have prepared an E-Book for your immediate download, which explains everything about the strategy including…

• Exactly how we implement the strategy from start to finish
• How we minimize our downside and have a fixed risk with every trade – yet we have UNLIMITED upside!
• How we can borrow 100% of the purchase price of the shares – and anyone can do it.
• How we share the exact trades we place on our account via the Protected Equity Trading Diary
• Even how you can have the trades we place on our account copied to your account automatically – without even ringing your broker – through a new service call PROTECTED EQUITY AutoTrader.

The E-Book is available for IMMEDIATE download in a package that includes all six Planet Wealth E-Books – all for one low price. Simply click on the link below and you can have access to these strategies within minutes … Download Here

There are alot of stocks forming the same sort of patterns at the moment, and with the overall market down, shorting stocks can be a high probability choice.

CPU is forming a familiar pattern right now. It meets the basic criteria that indicates the sellers are in control and are likely to be around for a bit longer. Let’s take a look starting with the weekly chart.  The first indication sellers have taken control are the Lower Peaks (LP) and Lower Troughs (LT). The stock consistently fails to make a higher price each time it rallies, instead it makes new lows each time it falls. The blue highlighted area is a cross section of 3 strong weekly resistance lines which the stock is likely to respect and be pushed lower again.

Now to stack the odds in our favour, and look for more to give a higher probability of the stock falling. There is a Head and Shoulders (H&S) patter that has formed and been validated. (see previous posts for details on this pattern). The target area is about $4.00, which is also a key support level. The last point I would consider is Fibonacci levels. CPU is at a significant Fibonacci number now, which has a high success rate of acting as a strong resistance.

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If you buy a Call option over a stock, it means you have the right (but not the obligation) to BUY the actual stock at an agreed price on or before an agreed date.

If you buy a Put option over a stock, it means you have the right (but not the obligation) to SELL the actual stock at an agreed price on or before an agreed date.

The idea behind buying options, rather than buying actual stock in the underlying company, is you can essentially ‘control’ the stock while only laying out a fraction of the cost.

It’s a simple case of Control versus Ownership. We can get all the benefits and profits from controlling the stock, without needing to put up large r) amounts of money to buy it in the first place.

Let’s go over an example…

A company has a stock price of $30, and if you wanted to buy that stock, you’d need to outlay $30 for every stock. Or you can buy an option that gives you control over that stock for a fraction of the price, often less than 5%. That means you can have control of the stock for only $1.50 (as an example), instead of laying out the full $30.

This is known in financial circles as ‘leverage’, and getting this leverage is the reason options are used, instead of simply buying the stock outright.

Let’s have a brief look at the benefits and risks in using options, so you understand why professional traders use options. We’ll compare a trade using the actual stock to one using stock options.

In the first example, the stock is $30, and we’ll assume the stock goes UP by $3 to $33. If you bought the stock at $30, and we’ll assume the stock goes UP by $3 to $33. If you bought the stock at $30, you have made a 10% return on your money.

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