Share Accumulation
Share accumulation is a strategy that involves buying and selling a particular stock and taking the profits to purchase additional shares. There are many different approaches to this strategy. The initial approach, is to buy shares, sell puts, and then sell covered calls against the shares already owned. Once this has taken place, we will "rinse and repeat" the process on a regular basis.
Frequently Asked Questions
How do you choose which stocks to buy in this strategy?
I look for a stock that has dropped significantly in value and is at/near a bottom of a long term weekly channel. I also look for one that has potential to move right back up over the long term.
How do you accumulate the shares?
You take profits from initial trades and purchase more shares. The more trades you make, the more shares you will accumulate. Once you have enough, you begin to sell calls against the position to create additional profit to purchase additional shares.
Can this be done with any stock?
Yes. You just need to be consistent and disciplined to trade it accordingly.
How long does it take to accumulate shares?
You being accumulating shares on your very first trade.