A tutorial by Jerremy Newsome explaining how to generate recurring income from stocks you already own by 'renting' them via options (primarily selling covered calls and using puts for protection). He gives concrete numeric examples (Nvidia and Tesla), shows how premiums and strike selection create monthly/weekly cash flow, and describes the collar strategy (use call premium to buy puts) to limit downside while collecting income. He also notes this is a long-established approach (options standardized in 1973) and that implementation/practice matters.
Questions this video answers
1973.
$12,000 of monthly income.
$125 per share (1,000 shares → $125,000).
Sell a three-week call at a $135 strike; premium about $1 per share (≈$1,000 total for 1,000 shares).
$10 per share appreciation → $10,000 total; plus $1,000 premium kept (he frames it as selling effectively at $136 → $11,000).
Chapters
If you already own stocks or they're being held in your financial advisor's account and you're not doing something with them monthly, you're missing out on a lot of money. We're talking tens of thousands of dollars every single year. They're just sitting there doing nothing. They could actually be working for you. In fact, did you know that you can rent out your stocks just like you rent out a house, bringing in monthly income without you needing or having to sell those shares? And yes, you can do it in a regular brokerage account, or you can do it in your retirement account that your financial advisor is not doing for you, leaving a lot of money and beautiful percent returns every year on the table. In this video, I'm going to show you how you can take your existing stocks without having to sell them and actually rent them out, bringing in income or what you call cash flow every single month and sometimes every single week. Just like a short term rental on an Airbnb. Except doing it with stocks. Most people think stocks are only useful when you sell them, right? Buying low and selling high. And that works great. Buying and holding works incredible. But you know what? Buying holding isn't very good for active income creation. I mean, if the stocks are going down or sideways, you really feel like your money is not doing anything for you. In fact, I've had one client who took a $720,000 account, was able to create $12,000 of monthly income off of that portfolio while still increasing the overall net balance of that account. Step one, you have to understand how options work. Options are literally stock market insurance. They were created in 1973. So this isn't a new strategy. In fact, it's been around your entire life. You just don't know how to implement it or use it. If you own shares and you sell what's called a call option, if you own a hundred shares, you are getting paid income to sell your stocks at a higher price. Now, do you actually need to sell your shares? And the answer is no. When you sell a contract, AKA a call option, and you choose to sell that call option at a higher strike price than the price that you purchase the shares, you have the ability at any time to close that particular position. Very, very often my clients and individuals that I work with are selling options and they're buying back those same option contracts within days or weeks. They don't necessarily have to wait months. And that's why, number two, just knowing the strategy isn't exactly enough. You also have to understand not only the buttons, but Some stocks are better than others. There's a really good chance you have an incredibly diversified portfolio with a bunch of boring names in it, like Johnson Johnson, Procter and Gamble, Pfizer. Those are boring. They don't really move. The underlying asset is pretty stable, kind of like Verizon and AT&T. If you look over the course of 20 years, they haven't really done anything at all. But there's a good chance you're still holding those names. You see, the strategy works incredibly well with stocks that are more volatile. If you were to buy Nvidia at $125, you bought a hundred shares. That's only $12,000 investment. So ultimately, if you think about it, it's very, very minimal. So let's add an extra zero so we can step into expansion. Buying a thousand shares of Nvidia at 125is $125,000. Now, the truth is you have that amount in your portfolio. You just have it spread out over 46 different companies. So now that it's a little bit more targeted, it's a little bit more focused, what's going to happen? It's going to expand quicker. So you buy $125,000 worth of Nvidia thousand shares, $125. You then turn right around and sell a three week call option at 135. You would all agree that 135 is higher than 125. In fact, it's 10 points higher. So what's crazy is when you sell a 135 three week expiration call option, you are going to receive a premium. That premium is going to be about $1. So that $1 represents one times your thousand shares or $1,000 of cash flow for this three week option expiring. And now you have the option, the ability or the privilege of selling Nvidia at 135. But remember, you bought it at 125. So if you buy a thousand shares of 125, you sell it at 135, you create how much? $10 of profit per share on a thousand shares or $10,000. And remember, you keep the $1,000 that you created from the covered call premium. So technically you're selling the stock at 136. That represents an $11,000 cash injection into your account. You now have $136,000 that you can reinvest into Nvidia again, or I mentioned Tesla. Now you can take that $136,000. You can buy 500 shares of Tesla if you buy 500 shares at Tesla at $340 a share, you turn right around, that's two weeks a 365 covered call. You're going to be receiving about $7 times those 500 shares or $3,500 of cash flow on approximately $136,000 investment. Now, of course, if you buy the shares at 340 and you have the ability of the option, of the right or the privilege to sell them at 365, that's $25 a share times your 500 shares if you get called away. Now, again, if you don't get called away, you keep the $7, you keep your shares, and you can do it again. Most people's biggest fear is actually selling their shares because they feel like they're losing their shares. But again, you're not losing anything, you're gaining money. You are selling your shares at a higher price. And this particular asset rental strategy allows you to get paid to sell your shares at a higher price. And then, of course, we talked about put options. The put option is how you can protect your downside in both of these scenarios. Now, a put option does cost a little bit of money, just like most insurance products do. But the absolute best strategy in the world that I have used and will continue to use with tens of millions or hundreds of millions of dollars is called the collar strategy. The collar strategy is when you sell a call option, you use that premium, that cash flow from the call option to buy a put option. But check it out. There's a really good chance, as I mentioned earlier in the video, you already own hundreds of shares of companies, which means that your cost basis is probably old, it's probably a ways back, meaning you already have positive equity in your shares. If you already have positive equities in your shares, you can buy a put option higher than you bought the stock for. So what that means is you have the legal ability to, to get paid to sell your stock either higher than you bought it for or higher than you bought it for, protecting your downside and creating an upside cap that allows you to get paid in the middle, going up, going down. Mathematically, you've gotten and received money to create an unlosable position. Jeremy, if this is so easy, how come everyone doesn't do it? It's easier not to. That's the answer. It's easier not to learn, it's easier not to study, and it's a lot easier not to watch this video, to reach out for help, or to drop a comment below.
