There is an american newletter selling a rent your share out for 3% a month,This involves selling a call option on share held at the share price,this allows someone to buy your share in one month and they will pay you 2-3% rent for this right for it.
if the share goes down you keep the money and the shares,sounds good doesn't it?
next month do the same again and get another 3% but the share has now fallen 30% for example
The following month do the same again and this time it goes back up in price but you don't gain from this as you have agreed to sell at the new low price for a 3% premium
An example, share price 500p sell 500p call option to expire in one month
share falls 20% to 400p you keep the 15p premium minus commissions
next month sell a 400p call option again for 12p
share falls 10% to 360p
final month sell 360 call option for 10p minus commisions
share goes back to 450p you have to sell for 360p but keep the 10p this time
You have 15+12+10=37p(370 pounds ))) in premium less commissions and a loss of capital of 140p or 1400 pounds per contract sold (1000 shares),so you have achieved an income but at a massive expense of your own capital
Selling puts for another 3% has similar problems,so if anyone is selling these ideas you will hopefully get detailed instructions on follow up actions and beware of the risks involved
Best wishes all Zulu
I should point out I use a variation of this so not completely against covered calls and puts but the devil is in the details