Now we're going to talk about some advanced strategies advanced trading. One of the ideas is you can put the dogs of the Dow stocks on long term option play called leaps. leaps are options that are one to two years out in terms of expiring so the strategy is basically simple. So buying the five dogs of the Dow stocks and collecting those dividends while you wait for it to move up the list and off the list. here instead buy the Leafs which are extremely cheap, a lot cheaper than buying the actual stock. Of course, you got the buying group so 100 and you give up on the dividends.

But the other hand Yeah, less money tied up. So this is a good way to get involved and dogs have a down. The downside is that the stocks go down. Of course the leaps go down, and then you're stuck collecting dividends and not That are slowly expiring one to two years out. The positive is the market goes up, your leaps go up like an option quite quickly, and you can make a lot more money a lot faster. Interesting enough, you can also do covered calls against those leaps, which I suggest you talk to your brokerage company about it but you can actually write calls against the leap and generate income as the stocks move off the list.

Finally, margin if you use margin and this is for non retirement accounts, most companies discount brokerage relied to margin up to 50% of your stocks and you paid the margin rate. I personally hate the margin. I don't use it very much. But if I do I keep it low 20 to 30% max of my available spending power margin call can get pretty ugly, where you have three days to show up with cash, the if the stock starts to decline in value and you get a margin call, and then you either come up with the cash or they sell off your stocks, it's pretty bad situation. So I try to stay away from margin. But there is a way to use margin, ie limited to 20 30%.

And a really clever way is, say in my taxable account, I have $10,000 in stock buying ability, and I margin out another 30%. So I'm at 13,000. But I know as my income comes in during the year, I can pay down that margin by the end of the year. So that way, I can generate more buying power and more trades and more profit with less cash tied up. So that's a good way of using margin. Margin does have risk As the stocks move against you, you can have to sell them at a deep discount and lose money in the process.

Now, another form of trading, which is very different is top dog strategy, which I call the put trading strategy, where you go for instead of the highest yielding dogs of the Dow on a dividend basis, you look at the lowest yielding dividend stocks and you can do put trades on them, you're actually buying puts, betting that the market will push them down usually in the form of leaps one to two years out. Here's a website, we can go ahead and look at dogs of the Dow all 30 stocks in sequence. So if we hop over that site, here we go. What I did was at this is today as all the Dow stocks and you go here, David So you start by dividend prices. And you can see here the stocks that have already reached their maximum value in terms of paying out minimum defense compared to the price of the stock so, so high probability stocks will go down over time, Visa, Goldman Sachs, Nike, united, apple, American Express.

So the strategy here would be to buy long term puts basically leaps at the current price. And as the stock starts to tumble and go down on the list, because you're not paying much of a dividend, it's good to see here the dividend yields are minimal. Those puts become worth more and more and more, and then you can sell put itself as a profit. So that's the dogs of the Dow upside down, or as I call them, the top dog strategy trading, just by using quotes One more would be doing dogs with the s&p 500. And here's a website here we can look at the sp 500 sorted by the dogs. Now on this one, they give you the screen here.

And you can sort by performance. And these currently have the highest yielding of the s&p 500. now realize that the Dow stocks are the 30 bluest of the blue chip best of the best voted by committee stocks in the world so their chances of falling flat on your face can happen but it's very small. The sp 500 is just the top 500 stocks. So these stocks are the outliners which can fall a lot easier, not necessarily good stocks to automatically buy. But you can go a little shopping in here and take a look and you can see that some of the names are The actual dow stocks like Verizon here would be an example. So what I'm looking for here is stocks, pricing that's near their 52 week low.

And they made me a good bargain like Philip Morris pays a very good dividend rate. Pricing which is also in the Dallas is another one. It looks interesting that I already own actually on both of these Ford had in the past. went through that whole bankruptcy thing the threat sold last not too thrilled by him. They're showing up on the list now, but automakers have their own set of problems so they may not get back anytime soon. Target interesting enough is here, even though it's off the top five or 10 list.

I did buy target. Six months ago I'm up over 30% because again, the stock was out of favor and was at an all time low. So, this is another way you can kind of shop and look for stuff of interest for dogs of the Dow type strategy