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Four Ways to Make Money On Stocks

On quiet days in the markets there's still plenty of opportunity to profit, Paul Price says.
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Even a boring day on the market can be a money maker, says Real Money's Paul Price. 

Slow days can take many forms. Sometimes it means that the market took a dip, with stocks reliably shedding value. On other days the market does nothing at all. In a low-volatility environment you can’t even run a short play. How can you make money in a market like that?

By paying attention to the four ways you can make profit on stocks. Price says:

“I came into work on Monday, with no specific ideas that had me raring to go," Price wrote recently on Real Money. "Futures were slightly positive. I found no new ideas over the weekend that got me really excited. On days like that, it often pays to sit back, relax and see what comes to you as a good trading opportunity."

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Without much price action or future guidance, Price turns to his four principles for making money off stocks:

  • Appreciation – Letting their value go up, then selling the stocks.
  • Dividends – Holding the stocks and collecting payments per-share.
  • Covered Call Income – Selling call options on shares of stock that you already own.
  • Naked Put Income – Selling put options on stocks you would be willing to own.

On a slow day, Price particularly focuses on writing calls and puts. These contracts generate immediate profits because of the premiums that you earn for each contract sold, although none come without risk. After all, the whole reason that someone has bought that contract is in hopes that it will profit them in the future.

Get more trading strategies and investing insights from the contributors on Real Money.