Shares can be rented out by a Sharelord who can earn an income each month and what many mum and dad investors don't know is that their share portfolio can also be insured.
Many investors purchase shares without any protection and their portfolio is 100% exposed. Would you not take out any insurance on your property portfolio? Of course you won't. The insurance policy on your investment property is there to be used if something goes wrong with your property. The insurance company will pay you out for the agreed value on the property.
The way that an insurance policy works on a home, it works exactly the same on the share market. A parcel of shares are purchased by the sharelord an their shares are insured by purchasing a put option over them. The price that the shares are insured for is selected by the sharelord.
Generally when a parcel of shares are acquired, those shares are rented out to speculators. The speculator pays us a premium and by utilising a part of that premium, an insurance coverage is acquired to cover any downside risk.
The Sharelord selects the strike price they wish to insure their shares for and that insurance policy that is purchased is valid for a certain amount of time. Usually an insurance policy is purchased on a per monthly basis.
So if shares were purchased for $20.50 and rented out for $21.00 and the sharelord was paid $1.00 for renting out those shares. A portion of the premium collected can be used to purchase an insurance policy. So if a $19.00 insurance policy was purchased for $0.30 then the up front profit will be $0.70.
There are two things can happen by the end of the contract period, the share price can stay above the $19.00 insurance price or below the insurance price. If the share price goes drastically below $19.00 the sharelord can turnaround and sell their shares for $19.00.
If the share stays below the $19.00 put option strike price and the insurance policy contract finishes, then the shares will be sold for $19.00. We will be paid $19.00 per share. The only time the sharelord would let their shares get sold at the put option strike price is if they are in profit.
The contracts will expire worthless if the share price stays above the insurance policy price and it will disappear from their share portfolio. Another insurance policy will need to be purchased if they decide to hold onto the shares for another month.
Many investors purchase shares without any protection and their portfolio is 100% exposed. Would you not take out any insurance on your property portfolio? Of course you won't. The insurance policy on your investment property is there to be used if something goes wrong with your property. The insurance company will pay you out for the agreed value on the property.
The way that an insurance policy works on a home, it works exactly the same on the share market. A parcel of shares are purchased by the sharelord an their shares are insured by purchasing a put option over them. The price that the shares are insured for is selected by the sharelord.
Generally when a parcel of shares are acquired, those shares are rented out to speculators. The speculator pays us a premium and by utilising a part of that premium, an insurance coverage is acquired to cover any downside risk.
The Sharelord selects the strike price they wish to insure their shares for and that insurance policy that is purchased is valid for a certain amount of time. Usually an insurance policy is purchased on a per monthly basis.
So if shares were purchased for $20.50 and rented out for $21.00 and the sharelord was paid $1.00 for renting out those shares. A portion of the premium collected can be used to purchase an insurance policy. So if a $19.00 insurance policy was purchased for $0.30 then the up front profit will be $0.70.
There are two things can happen by the end of the contract period, the share price can stay above the $19.00 insurance price or below the insurance price. If the share price goes drastically below $19.00 the sharelord can turnaround and sell their shares for $19.00.
If the share stays below the $19.00 put option strike price and the insurance policy contract finishes, then the shares will be sold for $19.00. We will be paid $19.00 per share. The only time the sharelord would let their shares get sold at the put option strike price is if they are in profit.
The contracts will expire worthless if the share price stays above the insurance policy price and it will disappear from their share portfolio. Another insurance policy will need to be purchased if they decide to hold onto the shares for another month.
About the Author:
Work With Danny Younes will teach you how to insure your share portfolio while still generating an income each month. Discover how to reduce your risk with Sharelord and have that sleep at night factor that you deserve.
Shares can be rented out by a Sharelord who can earn an income each month and what many mum and dad investors don't know is that their share portfolio can also be insured.
Many investors purchase shares without any protection and their portfolio is 100% exposed. Would you not take out any insurance on your property portfolio? Of course you won't. The insurance policy on your investment property is there to be used if something goes wrong with your property. The insurance company will pay you out for the agreed value on the property.
The way that an insurance policy works on a home, it works exactly the same on the share market. A parcel of shares are purchased by the sharelord an their shares are insured by purchasing a put option over them. The price that the shares are insured for is selected by the sharelord.
Generally when a parcel of shares are acquired, those shares are rented out to speculators. The speculator pays us a premium and by utilising a part of that premium, an insurance coverage is acquired to cover any downside risk.
The Sharelord selects the strike price they wish to insure their shares for and that insurance policy that is purchased is valid for a certain amount of time. Usually an insurance policy is purchased on a per monthly basis.
So if shares were purchased for $20.50 and rented out for $21.00 and the sharelord was paid $1.00 for renting out those shares. A portion of the premium collected can be used to purchase an insurance policy. So if a $19.00 insurance policy was purchased for $0.30 then the up front profit will be $0.70.
There are two things can happen by the end of the contract period, the share price can stay above the $19.00 insurance price or below the insurance price. If the share price goes drastically below $19.00 the sharelord can turnaround and sell their shares for $19.00.
If the share stays below the $19.00 put option strike price and the insurance policy contract finishes, then the shares will be sold for $19.00. We will be paid $19.00 per share. The only time the sharelord would let their shares get sold at the put option strike price is if they are in profit.
The contracts will expire worthless if the share price stays above the insurance policy price and it will disappear from their share portfolio. Another insurance policy will need to be purchased if they decide to hold onto the shares for another month.
Many investors purchase shares without any protection and their portfolio is 100% exposed. Would you not take out any insurance on your property portfolio? Of course you won't. The insurance policy on your investment property is there to be used if something goes wrong with your property. The insurance company will pay you out for the agreed value on the property.
The way that an insurance policy works on a home, it works exactly the same on the share market. A parcel of shares are purchased by the sharelord an their shares are insured by purchasing a put option over them. The price that the shares are insured for is selected by the sharelord.
Generally when a parcel of shares are acquired, those shares are rented out to speculators. The speculator pays us a premium and by utilising a part of that premium, an insurance coverage is acquired to cover any downside risk.
The Sharelord selects the strike price they wish to insure their shares for and that insurance policy that is purchased is valid for a certain amount of time. Usually an insurance policy is purchased on a per monthly basis.
So if shares were purchased for $20.50 and rented out for $21.00 and the sharelord was paid $1.00 for renting out those shares. A portion of the premium collected can be used to purchase an insurance policy. So if a $19.00 insurance policy was purchased for $0.30 then the up front profit will be $0.70.
There are two things can happen by the end of the contract period, the share price can stay above the $19.00 insurance price or below the insurance price. If the share price goes drastically below $19.00 the sharelord can turnaround and sell their shares for $19.00.
If the share stays below the $19.00 put option strike price and the insurance policy contract finishes, then the shares will be sold for $19.00. We will be paid $19.00 per share. The only time the sharelord would let their shares get sold at the put option strike price is if they are in profit.
The contracts will expire worthless if the share price stays above the insurance policy price and it will disappear from their share portfolio. Another insurance policy will need to be purchased if they decide to hold onto the shares for another month.
About the Author:
Work With Danny Younes will teach you how to insure your share portfolio while still generating an income each month. Discover how to reduce your risk with Sharelord and have that sleep at night factor that you deserve.
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