I’ve gotten quite a few questions recently about “income” and “buy stocks cheap” letters that are clearly veiled hints about put option selling… so I thought I’d take a look at one of them.
The ad in question today is from Karim Rahemtulla, who calls himself “The Frugal Millionaire” in this spiel and has been involved in a bunch of different Agoraplex newsletters over the years. He has pretty regularly pitched the idea of “options income”, though this particular newsletter seems new — it’s called Automatic Trading Millionaire (subtlety will get you nowhere), and he’s currently selling it for $995/year by promising that his “coupon codes” will let you buy stocks at a discount. You can see the whole ad here if you want more of the details, but if you give me a few minutes I’ll explain what he’s talking about…
Here’s a taste of the pitch, from the order form:
“Receive Your First Stocks for Up to 50% Off
“(And Over $1,500 in Instant Cash Opportunities)
“It’s time to start saving money on every stock you buy.
“Why pay full price and lose sleep over falling prices?
“With these stock market coupons, you can get the chance to pay up to 50% less than the average investor.
“You’ll receive your coupon codes within moments of completing your order.
“When you use this strategy, it…
- Makes your returns even BIGGER when stocks go up.
- Protects you from losses when stocks go down.
- Hands you thousands in instant cash income.
Going by the pitches made throughout the ad, this is clearly all about selling put options… which means you sell someone the right, at a specific price and before a specific date, to “put” their shares to you.
Here’s one example, of dozens that he runs through in the ad:
“It truly is a chance to get the stocks you want at BIG discounts to today’s prices – up to 50% off.
“You can do it with virtually any company…
“For instance… General Electric.
“It trades for $14.
“But you could offer to buy GE for $10: 28% off!
“That’s why I think of this approach as using a ‘stock market coupon.’
“The chance to get it at 20% off works instantly.”
That one includes a little graphic of a GE “coupon” for buying the shares at 28% off, but it also includes the code (GE190118P10), which is a simple put option ticker.
What does that mean? The first part of the put option ticker is the stock symbol, GE… then