The 10K Strategy is sort of like writing calls, but on steroids. Instead of buying stock and selling calls against your shares, we buy longer-term options (both puts and calls) which decay at a much slower rate than the shorter-term (usually weekly) options that we sell. Since these longer-term options cost a fraction of what the stock would cost, the potential return on investment is considerably higher with this strategy.

The key to the strategy is the difference between the decay rates of the long and short options. The major challenge is managing risk by selecting strike prices both above and below the stock price and by balancing the risk profile of the positions every trading day.

Unlike owning stock, longer-term options are deteriorating assets, just like the shorter-term options that we sell. Maintaining a comfortable risk profile requires nimble trading to adjust strikes and duration constantly throughout the day.

In short, it takes a lot of work … and a lot of trades throughout the week. That’s why most Terry’s Tips subscribers sign up for PeakBot, which automatically trades their accounts in any or all portfolios that currently trade MSFT, IWM, QQQ and DIS. You’ll never miss a trade with PeakBot.

Get more info on how to automate Jon's "10K Strategy" here.