Like 3M? Here's $203 To Buy It...

Many of us have hobbies and interests.

For instance, I love listening to music and going to concerts.

I've seen many great acts over the years - Elton John, Billy Joel, Prince, the New York Philharmonic, and even my local high school band (they're really good!).

But one thing many of these fun activities have in common, is that they cost money. Yes, some are free, but a majority require payment.

Wouldn't it be great if we could be always be paid for the extracurricular things we like to do?

Well, I just so happen to know of a way we can all get paid for doing something many of us


Put-Selling = Money

It's no secret I'm a huge fan of option trading. Heck, I've been doing it professionally for 27 years now.

My favorite strategy? Without a doubt, it's selling put option contracts.


Because I get to collect tons of cash just for my decision (hobby) to buy a stock.

How does that even work?

It's simple. Since I have an interest in the stock market, I like to buy stocks that I feel will reward me with dividends and upward price appreciation.

And when I decide to invest in a stock, I don't actually buy the shares at its current price.

I choose a level at least 20% below the current price and sell the corresponding put option contract.

When trading options contracts, there's always two players - a buyer and a seller.

The put-option buyer is expecting the stock price to fall and is willing to speculate on that decision.

The buyer must pay the entry fee to participate in that wager. It's called the "premium", and goes right into the pocket of the put-option seller.

In exchange for the seller receiving the premium, he or she must commit to buying the stock at the agreed-upon level, called the "strike price".

What level is the strike price?

Any level, you as the put-option seller, decides on.

You make the call and decide where you would like to buy the stock.

For me, as I said above, it's typically 20% below where the stock currently trades.

Once I decide on my level, I sell the put option and collect the cash.

Let's look at an example.

Buying MMM = MMMoney In Your Pocket

I have an interest in buying 3M Corp.

It's recently dropped about $60 per share (with a slight recovery) over the last two months. This huge drop is part of the reason why I'm so interested. It currently sits near $172 per share.

Here's its current chart.

I feel it's still very oversold and due for the eventual climb back higher. Plus, it's a stalwart of a company and holds a spot on the coveted "Dividend Aristocrat" list.

Dividend Aristocrats are companies that have raised their annual dividends each year for at least 25 years. MMM has raised theirs for an incredible 61 years in a row. That's a solid company in my book.

But I'm not interested in buying it at its current bargain price of $172. No, I want even more of a deal.

Using my guideline of 20% off, I would entertain the idea of buying it at $135 per share.

How could I buy it at $135 when it currently trades at $172?

I can't.

But I can contract myself out ahead of time to buy it at $135 if it happens to fall to that level in the future.

Sure, I could just sit and wait, hoping that it'll fall to $135. But there's no guarantee that it will.

Selling put options is a better way to go about this.