How I Get Paid While I Wait for Stocks to Recover

New Video

Author

Don Kaufman
August 07, 2025

Hey there, Blake here. 

Most traders panic when markets get choppy. I build safety nets.

While everyone's chasing the next AI rocket ship, I'm looking at something way more boring - and way more profitable. 

I combine dividend yields with put premiums to create what I call "safety nets" that can deliver 6-10% returns even if stocks go nowhere.

Here's how the math works on a real example I just analyzed:

My CVS Safety Net Breakdown

CVS Healthcare currently pays a 4.2% dividend. Nothing special there - you can get 4.23% risk-free in 10-year treasuries.

But I don't just buy the stock. I sell puts first.

My Setup:

  • CVS trading around $62

  • I sell September $60 puts for $1.44 (2.3% premium)

  • Stock would have to fall to $58.56 before I get assigned

  • If assigned, I collect $0.66 quarterly dividend on my lower cost basis

My Safety Net Math:

  • Put premium: 2.3%

  • Dividend yield: 4.2%

  • Combined protection: 6.5%

We're approaching 9% between the dividend yield and the put premium that I use to reduce my cost basis.

That means CVS could drop 9% and I'd still break even. If it stays flat, I collect 9%. If it goes up, I win bigger.

Why I'm Watching This Now

I'm seeing sector rotation that most traders miss. Utilities are rising while tech stays flat - classic "flight to safety" behavior.

When things get uncertain, there's usually a flight to safety and a risk-free return. With possible September rate cuts and economic uncertainty, dividend stocks could become the new high-flyers.

The 10-year treasury yields 4.23%. I'm systematically finding ways to beat that with protection built in.

My Real Edge

Most income investors just buy dividend stocks and hope. I layer in put premiums to reduce my cost basis before I even own the shares.

On my Kinder Morgan example: I collect 2.5% monthly selling puts. If I never get assigned, that's 30% annualized. If I do get assigned, I own the stock cheaper and start collecting a 4.3% dividend.

Want to see my complete dividend strategy in action?

I break down four specific stocks - including one paying 7% dividends - with exact strike prices, timeframes, and my systematic approach to building these safety nets. 

Plus why I think the next 2-3 months could be prime time for dividend plays.

Take care,

Blake Young