This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.

Today – taking a break from our normal publishing schedule – we are continuing our “12 Days Of Christmas” series.

Better than nine ladies leaping or 11 pipers piping, Porter & Co.’s version of the “12 Days Of Christmas” brings you something actually useful: hard-earned investment lessons to guide you through 2026. For the remainder of the year – in place of our regular research and insights – we will dish out key lessons from 2025… some earned from pain and others from gain. 

Over the past year, editors across all of our publications have recommended stocks, bonds, or other trades that have resulted in a mix of outsized performances and humbling underachievements. Having begun December 23 and extending through tomorrow, we will reveal a pivotal lesson – about why a stock soared to double-digit returns, or why one languished. We will also explore the ones that got away – that we sold too soon or that we didn’t recommend at all. 

Today, in our penultimate installment of “12 Days,” analyst Ross Hendricks shares with readers some lessons learned from his experience overseeing Porter & Co.’s Trading Club, which we launched on May 30, 2025… One takeaway: trading options does not have to be painful, risky, or costly. It’s actually a smart way to generate income and boost overall returns, regardless of what the market does.

Silver is one of the best-performing assets in the world this year, ending 2025 with a gain well above 100%.

We first began altering readers about silver last year, in an October 2024 Daily Journal. At the time, the price of gold had been surging, but silver had not kept pace. Porter noted how the gold-to-silver price ratio indicated that the white metal had become extremely undervalued, and he predicted a breakout year ahead:

The key drivers of the precious metals bull market – runaway deficit spending and monetary expansion globally – remain firmly intact as we enter 2026. So while we remain bullish on gold and silver as the ultimate forms of monetary insurance, there’s just one problem…

As unproductive assets – precious metals don’t generate profits or cash flows – they merely shield investor purchasing power from monetary debasement. And yes, significant capital gains are possible from buying at the right price – like the 100% return for those who bought silver when we recommended it in October 2024. But ultimately, this upside requires other buyers to continue bidding up the price after you buy. 

Inevitably, at some point in every precious metals bull market, buyers become exhausted. This can then lead to prolonged stretches of flat or negative returns. We saw this for silver and gold most recently in the 12 years from 2011 to 2023, and before that, the 26-year stretch from 1982 to 2008. 

But what if you could transform your precious metals holdings into a consistent source of income, regardless of whether prices move up, down, or sideways? And what if you could do it without taking on any additional risk?

It may sound too good to be true, but I (Ross Hendricks) will show you how we did exactly that in The Trading Club in 2025. It’s an opportunity made available every single trading day in the options market.

Yes, the dreaded “O” word. The mere mention will surely turn off a large portion of our audience. 

And I get it. Options have a bad wrap. They’re often associated with high-octane trading strategies, where fortunes can be (and have been) lost. 

But here’s the reality: options are merely a tool. When used recklessly, they can become instruments of massive portfolio destruction. But when used with the proper care and respect, options can actually reduce the risk in a portfolio while generating consistent cash flow along the way. 

Today, I’ll show you exactly how this works with the most basic, lowest-risk options strategy available: selling covered calls. And this isn’t hypothetical – these are real trades. 

I’ll reveal the exact moves we’ve made in The Trading Club real-money portfolio this year to unlock an 18% annualized yield from our silver position, via the iShares Silver Trust (NYSE: SLV). 

And here’s the best part: this same basic strategy can be applied to any stock or exchange traded fund (“ETF”) that has an active options market. It’s the safest, easiest way to transform any portfolio into a consistent cash generating machine. 

Let’s get started with the basics… 

Selling covered calls is an options-trading strategy where you own the underlying stock (100 shares per option contract) and sell a call option against those shares. The call buyer on the other side of the trade obtains the right, but not the obligation, to purchase your shares at a specified price (strike price) by a set date (expiration). As the call seller, in exchange for agreeing to sell your shares in the future at the strike price, you receive an upfront cash payment (premium). 

So by selling covered calls, you make a simple trade off: collect upfront cash premiums today and surrender future upside tomorrow. 

The beauty of this strategy is that it doesn’t involve taking any additional risk versus a buy-and-hold strategy on the same underlying stock. In fact, the premiums generated from covered calls reduce risk by bringing additional cash into the portfolio. 

For investors living on fixed income, covered calls can provide a nice boost to dividend and interest income. Alternatively, for more growth-oriented investors, covered-call premiums can be reinvested into additional opportunities, amplifying a portfolio’s compounding potential.  

Next, we’ll show you exactly how we’ve done this with our precious metals positions in The Trading Club, including a live trade that’s currently in our live tracking portfolio today. 

The first step required to sell covered calls is to purchase at least 100 shares of an underlying stock or ETF. 

So this example begins with our September 2 trade alert to members of The Trading Club, when we recommended buying silver via the iShares Silver Trust (NYSE: SLV), including the following excerpt: 

Our standard procedure is to wait until the following day after publishing a trade alert to subscribers before placing the trade in our live, real-money tracking portfolio. So on September 3, we purchased 300 shares of SLV at $37.27 each. This $11,181 purchase represented about a 10% position size in our tracking portfolio, which had started at $100,000. 

Now, here’s the thing – we don’t always begin selling covered calls immediately after buying a stock or ETF. In cases where we see significant near-term upside, as we did with silver in September – then trading for $41 per ounce – we like to give the stock or ETF room to run. That way, we create the opportunity to capture a significant capital gain in addition to the income generated from the covered calls. 

That opportunity quickly presented itself, as silver prices soared to new all-time highs above $50 per ounce by mid-October (which corresponded with an SLV ETF price in the mid-$40s). 

We then began selling covered calls to generate income, with the following trades: 

Now, one thing to note about option pricing: brokers quote each contract on a “per share” basis. But each contract references 100 shares. So the actual value of each contract comes with a 100-share multiplier. 

So in the case of our SLV covered-call sale on October 14, the $1.54 option price generated $154 in gross premiums, and $153.33 after trading fees and commissions, as shown below: 

Likewise, the two covered calls sold at $0.89 on October 31 generated $176.66 in net cash: 

Here’s the great part: this cash shows up in our brokerage account immediately after placing each covered-call sale. So without taking on any additional risk, these call sales generated a total of $330 in upfront returns. And just like that, we engineered the equivalent of a cash dividend from our zero-yield SLV position. 

And the even better part: each of these call options expired worthless, meaning the SLV price traded below the $46 and $48 option strike prices on the expiration date. This meant we kept our 300-share SLV position, and pocketed the premiums, free and clear. When this happens, it means we can then repeat another similar trade and keep the income flowing into our account. 

That’s exactly what we did on December 11, when silver prices continued running to new record highs, breaking out above $60 per ounce (or the mid-$50s for the iShares Silver ETF). Next, we’ll take a closer look at this current trade in our live tracking portfolio to show how it works in greater detail. 

Analyzing Our Live SLV Covered-Call Trade 

On December 11, we placed the following covered-call trade on 200 shares of our SLV position: 

Sold two iShares Silver Trust (NYSE: SLV) $60 covered calls, expiring January 16, 2026, for $2.00 per contract. 

Let’s begin by walking through how to place this trade, which requires the following six trade inputs: 

Here’s what placing this order looked like in our Fidelity tracking portfolio on December 11, when SLV traded at $56.94 per share:  

After fees and commissions, this trade generated $398.70 in cash premiums from the two covered calls, or about $1.99 per share. This represented a 3.5% cash return on the $56.94 SLV share price at the time of the trade. And with this trade occurring over the course of 36 days, that works out to an annualized return of 42%. 

Importantly, we’ve locked in this return from the call sales, regardless of where SLV shares go from here. And if we fast forward to the January 16 expiration date, one of two outcomes are possible: 

Thus, we sold two covered calls that capped the upside on 200 of our 300 SLV shares at the $60 strike price. And even though we’ve capped our upside at the $60 strike price, that still leaves a juicy potential return on the table.  

Specifically, we left ourselves with $3.06 in potential capital gains between the $56.94 SLV share price at the time of the trade and the $60 strike price. Adding in the $1.99 per share in net premiums from the call sales, that’s a total return of $5.06 per share. Relative to the $56.94 SLV share price, that works out to an 8.9% return over just 37 days, or 137% on an annualized basis. 

We’re perfectly willing to limit our future upside to these kinds of returns in exchange for collecting upfront income today. 

Finally, let’s consider the kind of returns possible from a consistent covered-call selling strategy using our SLV example. 

Since we first began selling covered calls on our SLV position on October 14, we’ve collected the following premiums over the three transactions discussed above: 

$153.33 + $176.66 + $398.70 = $728.69 

Relative to our $11,181 cost basis on the 300 shares of the iShares Silver ETF, this $728.69 in cash premiums represents a 6.5% yield over the course of 135 days (going out to the next option expiration date of January 16). That works out to an annualized yield of 28%. 

And therein lies the power of a simple covered-call strategy. We’ve transformed a non-income-generating asset into the equivalent of an high-yield security. And we did it all without taking any additional risk.

This is just one example. The options market offers this same opportunity on thousands of individual securities each trading day. And tapping into these opportunities makes up the core approach we use in The Trading Club. 

Most trading services focus on timing the market – hoping to buy low and sell high. But constantly outsmarting Mr. Market is a tough game to win. 

The far easier game to win is the one that pays you regardless of whether the market moves up, down, or sideways. Our overall goal: structure a portfolio filled with uncorrelated return streams that offer a positive expected pay off over the course of many trades. 

And we’re quite pleased with the results so far, with our live tracking portfolio up 18% since our May 30 launch date. 

If this strategy sounds like something your portfolio could benefit from, we’ll be opening up The Trading Club for new members in the spring. 

Click here to become part of The Trading Club. 

Porter & Co.
Stevenson, Maryland