how do i rent a stock say from a 401k or common st?

Question

i was at a trade semenar i herd you can rent out your stock say like rentting a appartment

Answer 1

There is no practical way to rent out your stock. But if your broker keeps your shares for you, as most brokers do, then he is allowed to loan them out to others for short-selling. It does not affect you in any significant way. When you want to sell, if your shares are loaned out, the broker will get them back in time to process the transaction.

Covered calls is another topic - a great, conservative strategy.

Best of success.

Answer 2

The strategy that you are referring to is called Selling Covered Calls. It was popularized in the late 90's by Wade Cook as a means of supplementing your income. Mr Cook made the strategy seem very easy and without risk. Based upon the fact that his company is now bankrupt and facing countless lawsuits, I would say he was wrong. The strategy works as follows: You first must have a brokerage account with option trading approval. You then would either buy at least 100 shares of a stock or move the shares that you owned previously into the brokerage account. Check yahoo finance or some other source to make sure that the stock that you are using has option chains assigned to it. Let's say for example that you buy your 100 shares at $20 per share. You would check the option chains on your stock and find that there are some strike price 25 options that expire 3 months out that have an ask price of $1.00 per contract. You could then SELL one September 25 Call option against your 100 shares of stock. By doing this you are saying that sometime between now and September, if the stock price reaches 25, you would agree to sell your stock for $25 per share. So now you ask, Where's the secondary income? When you sold that one September 25 Call option for $1.00 you received $1.00 for each share that you own for a total of $100. This is yours to keep and do whatever you want with it. In this scenario, if the stock price did reach 25 before September you would then sell your stock for a $5.00 per share profit. If the stock price doesn't reach $25 by September, you get to keep the $100 that you made and you get to keep the stock. You could then sell another call option against your 100 shares of stock. In theory, you could do this over and over again. I left out commissions and taxes in my discussion but they would have to be factored into the scenario as well. The strategy can work but there is more risk and work involved than Mr Cook led his readers into believing. Good luck and Be careful

Answer 3

WOW