Last month in The Warrant Observer newsletter I went deep on the Snorkel Trade (pun intended). I showed exactly how I am making money consistently, even during summer vacation.

As I said in the newsletter, this is a great trade for a set and forget strategy. You can check it once a week, day, or hour, depending on your current schedule. And it’s a low risk trade with a consistent return.

It is also almost always available. Some warrant trading right now has the characteristics necessary to put on the trade. I used AIG and AIGWS to illustrate how I’m using the trade to make money.

Put Selling for Additional Profit

Another thing I like about the trade is it offers several different ways to make money.

One of those ways is through put selling.

In the snorkel trade you’ll have a long warrant and short stock position. Generally you’ll be short some percentage of stock less than 100%, against your long warrants.

You can also be short via calls. Which is a great way to collect premium.

AND, you can also short puts against your short stock position.

This let’s you collect two premiums on your hedged position. From selling both a call and a put.

Simply identify the spot where you would buy back some percentage of your common stock and sell a number of puts at that level.

For example, if the stock is trading at $20, and you’d be willing to buy back 200 shares of your short common position at $19, then why not sell 2 $19 strike put options.

If the stock gets there then you’ve covered some of your short. If not, you’ve collected premium on the put contracts.

Adding puts into the equation provides one more layer of profit into the trade.

Tomorrow I’ll go into one of the models I use to capture all available arbitrage opportunities.

And then, at the end of the week the latest issue of The Warrant Observer newsletter will be released. This year, my first providing the Warrant Observer membership and newsletter, has really been beyond my wildest expectations.

You guys have absolutely knocked it out of the park with wins EVERY SINGLE MONTH! Unbelievable. Keep the emails coming, LOVE to see the successes you’re having!!

Don’t miss out on the newest issue this Friday. You can subscribe here.