The Banker’s Code: How to Make Money 94% of the Time on the Secondary Stock Market

Low Risk

While I was working in London at the trading desks of Citigroup and Salomon Brothers, the other traders and I used a secret strategy I called “the Banker’s Code.”

It was powerful.

So powerful, in fact, that we made money on almost every trade. Day in, day out. Up market, down market. While other investors frantically chased trends, gambled on the latest “hot” stock, and tried to discover the next big thing, we quietly and safely followed the Banker’s Code.

And it made us money almost every day, on nearly every trade we entered.

Unfortunately, most investors don’t do it this way.

The Dalbar financial research firm recently released a report that showed investors “guessed right” in the market only 42% of the time last year.

I don’t want you to guess right only 42% of the time. In fact, I don’t want you to guess at all. That’s why I’m sharing with you the Banker’s Code.

Now, I have been involved in income investments for a long time. And over my career, I have studied every different type of income investment that exists—from the stock market to bonds, to insurance, to real estate…

I’ve studied them all, and I can categorically say—without any hesitation or doubt—that the Banker’s Code secret we’re going to show you in this report is the single best way I know to earn income from the stock market. I am not exaggerating.

I have a 94% win rate using this strategy. I have every reason to believe that you will enjoy this tremendous success too.

The bottom line is if you’re going to be in the market, you have to know this strategy. It’s a huge advantage. It will make a difference in your income.

It’s one thing to tell you this. But let me show you I’m speaking the truth:

I’ve been using the Banker’s Code strategy with selected individuals since January 2012. In that time, we’ve made money on 47 of our 50 trades.

I’d love to take credit for this success, but I can’t. It wasn’t my intelligence that resulted in this phenomenal win rate—it was merely following the simple strategy of the Banker’s Code.

I’ll say it again: This strategy is powerful. But it’s also vital. Now, more than ever, it’s a crucial skill every investor should have in their toolbox. Why?

Because the cards are stacked against you.

To begin, it’s just not easy to earn income anymore. And I put the blame squarely on the Federal Reserve.

In 2008, the Federal Reserve set interest rates at nearly zero. For people like you and me, this was possibly the most financially destructive move the government could have made.

You see, with rates this low, the Federal Reserve is preventing little guys like you and me from earning a fair, safe return on our money.

It used to be that you could earn 4% in a savings account or government bond. No longer. Today, these accounts literally pay just a hair above 0%. Where do you earn safe income? How do retirees, who rely on fixed income, generate cash?

For most people, there’s simply no good answer.

That’s why I am furious about the Fed’s actions. I believe it is nothing less than evil.

But this is the reality: Interest rates are practically zero right now. And they’re going to stay at this level for years to come. Perhaps decades.

Facing this unpleasant reality, many people have given in. They either park their savings in cash (earning nothing) or buy junk bonds or high-yielding stocks in an effort to earn what was once “the norm” in savings accounts. The problem with this is that it significantly increases risk.

I hate risk.

The paradox of the Banker’s Code is that, despite its good returns, it’s safe. Safer than high-yielding stocks. Safer than junk bonds. And far safer than flash-in-the-pan growth stocks.

And not only is it safe, but it also works in any kind of market—bull market, bear market, sideways market…

It doesn’t matter. The Banker’s Code churns our money, regardless.

The old ways of earning safe income may not work anymore, but that’s all right. Today, I’ll show you a better way. Actually, today I’ll show you the best way.

The Banker’s Code Will Make You Money… Period

The Banker’s Code strategy stuffs your pockets with cash. But rather than me just telling you this, let me show you what people who are using this strategy are saying:

“I am thrilled with the results and averaging more than $2,000 per month. In six months, I have made $13,890.” —Paulina

“I have done every trade you have recommended so far and have made money on every one of them. I am very happy with your service.” —Lionel

“I made about $4,000. This has been transforming for me at many levels. [I] know I can CONFIDENTLY make money for the rest of my life.” —Rick

Real people are making real money with the Banker’s Code.

But is it for everyone?

Absolutely. Whether you’re 29 or 89, you will make money with this strategy. And you don’t have to be a financial whiz to make it work, either.

Even my father is making good money with the Banker’s Code. In fact, it saved his retirement.

See, Dad lost nearly all of his retirement savings in the stock market crash in 2008. Two of his largest holdings were in Lehman Brothers and Citigroup.

The money he had in Lehman literally disappeared. Its value went to zero as the stock became worthless. And Citigroup? Its price went from $410 per share in August 2000 to less than $15 by February 2009. The crash practically destroyed my father’s retirement income overnight.

What was he to do? What income would he live on? I decided to teach him the Banker’s Code strategy, although he had zero prior understanding of it.

Flash forward to last week—my dad was ecstatic to tell me that the strategy had just made him more than $2,000 in cash… in one day.

I will use this strategy for the rest of my life. So will anyone else who is willing to learn it. And it will make us money for as long as we want.

How You’ll Make Money—The Big Picture

Let’s start with a high-level overview, sort of a big picture of how this strategy works. I’ll use an analogy we all can understand—buying a house.

Imagine a beautiful mansion located right on the beach. It’s listed for $1 million, except you don’t want to pay $1 million. You want to pay only $750,000.

You know that $750,000 is an extraordinary price for this mansion. And you have the cash in your bank to pay for it.

Let’s assume you approach the owner and say, “I’d like to buy your home for $750,000.”

The owner would say, “Thank you, but my asking price is $1 million. But I’ll keep your offer in mind… and if I change my mind, I’ll let you know.”

Then the owner does something that surprises you. He hands you a check for $5,000. All you have to do is promise to buy his house for $750,000 anytime in the next month if the owner wants to sell it for that price.

Why would he do this?

Because it’s a good deal for both of you. The homeowner gets a month to search for a buyer willing to pay more. But he has the assurance of you paying $750,000 if no other offers materialize.

If the homeowner doesn’t sell you the house, you get $5,000… free and clear. But if he does sell you the house, you get exactly what you wanted in the first place.

Actually, it’s better than what you wanted. You’ll pay $750,000 and keep the $5,000 he gave you as part of the agreement. That means you’ll buy this new, beautiful home for only $745,000.

What I’ve just described is the essence of the Banker’s Code strategy.

Earning Income by Making Low-Ball Offers

The Banker’s Code revolves around the following principal:

Making low-ball offers on assets you want to own anyway, then receiving income for making those offers.

It’s simple, powerful, and profitable. And whether or not you ever actually acquire those assets doesn’t matter. Why? Because your primary goal is to generate cash from making low-ball offers. And that will happen regardless of whether or not you’re able to buy the valuable asset.

Let’s apply the Banker’s Code strategy to the stock market, which is where it works best. In our example above, what we wanted was premium, beachfront real estate.

What is the equivalent of that in the stock market?

Quite simply, the equivalent is the best blue-chip companies in the world. Companies that make products that will never go out of fashion… that have the strongest brand names… that produce billions of dollars in cash every year.

These companies pay out hefty dividends. They buy back mountains of their own stock. They have zero, or very little, debt. They boast the most conservative management teams. And they do business all over the world.

These are companies like McDonald’s, Johnson & Johnson, or Microsoft… the very best companies. The names you know. The products you use every day. They’re the beachfront companies of the stock market.

Normally, these companies aren’t cheap. They never get really cheap, because everyone knows they’re the best companies. Just like beachfront property, they usually don’t come at a discount.

Because of this, what you’re going to learn to do is make low-ball offers for these excellent companies. You’ll submit offers with asking prices below the current market prices these stocks are at. And in exchange, the current stock owners will pay you cash.

A Low-Ball Offer on the Best-Known Company in the World

Let’s walk through the process of making a low-ball offer. Seeing the concept illustrated with an actual stock will help you understand how it all works.

We’re going to make a hypothetical low-ball offer on Coca-Cola (NYSE: KO).

Why Coke? Because it’s one of the best stocks in existence.

Both globally and in the U.S., Coke dominates the liquid-refreshment beverage industry. It has a 34% market share in the U.S. While it’s best known for its sodas, Coca-Cola has 500 other beverage brands that sell in more than 200 countries worldwide.

It boasts the single most recognized brand in the entire world. People all around the globe know and love Coca-Cola products. If that’s not enough for you, Warren Buffett, arguably the world’s greatest investor, has made billions investing in Coke. He now owns 400 million shares, valued at $15.17 billion.

Year in, year out, Coke is one of the world’s most elite stocks. This is “beachfront property” at its finest.

At the time of this writing, Coca-Cola stock trades for about $40 per share. But we don’t want to pay $40. Even though it’s worth that price, we want to offer to buy it at $36 per share. But with one catch… we’re willing to keep this low-ball offer on the table for only six weeks. After six weeks, we’ll take our offer off the table.

We now have our game plan. A $36 low-ball offer, which will expire six weeks from the day we make it. Now, best of all, we’re going to get paid to make this offer.

Our low-ball offer is valuable to the current owner of the Coca-Cola stock. You see, our low-ball offer gives the current owner some flexibility. It’s a “Plan B,” so to speak.

Under the circumstances we both agree to, he’ll be able to sell us his stock. But he doesn’t have to, either. It’s his choice—and that’s valuable. He pays us for this value.

In this case, the owner of those Coca-Cola shares pays us $70 cash. The amount of cash we receive will change on a trade-by-trade basis. In this case, it was $70. The next trade could be $105. The next, $55.

Six weeks from our low-ball offer, if we don’t own Coca-Cola stock, our offer expires. What happens to that $70? Do we have to return it? Nope. It’s ours. We never have to pay it back under any circumstances.

You might be wondering: “Well, what happens if someone does take us up on our offer and sells us their shakes of Coca-Cola?”

We’ll get to that in a bit, but for now, we just want you to understand the main strategy of the Banker’s Code: We make low-ball offers on the world’s safest, most profitable, best-run companies, and we’re paid cash to do it.

It’s really that simple.

Three Real Low-Ball Offers That Have Stuffed Cash in Our Pockets

Let’s move from our hypothetical Coca-Cola trade and look at some actual trades I’ve recommended over the last 15 months:

American Express (NYSE: AXP) is a 163-year-old multinational financial services company best known for its top-tier credit cards.

On July 24, 2012, we made a low-ball offer on American Express. In exchange, the American Express shareowner paid us $97 to keep our offer on the table for three weeks.

At the end of the three weeks, we didn’t get to buy American Express, so our low-ball offer expired worthless, but we kept the $97, anyway. Our return? 1.8% in just three weeks. That might not seem like a lot, but that’s an annualized return on our investment was 26.8%.

Nike Inc. (NYSE: NKE) is the unrivaled, U.S.-based global marketer of athletic footwear, apparel equipment, and accessory products. The Nike “swoosh” logo is one of the world’s most recognizable brand marks.

On July 3, 2012, we made a low-ball offer on Nike. In exchange, the owner of Nike stock paid us $132 to keep our offer on the table for a little over two-and-a-half weeks.

At the end of the 17 days, we didn’t buy Nike, so our low-ball offer expired worthless, but we kept the $132, anyway. This time we earned 1.5% in about two-and-a-half weeks. That’s the equivalent of earning 32.4% on our cash each year.

GlaxoSmithKline (NYSE: GSK) is one of the world’s leading makers of pharmaceuticals and consumer health products. It has been in business for 297 years. The company’s products include drugs for cancer, heart disease, and diabetes. Its consumer health products include well-known brands such as Tums, Aquafresh, Sensodyne, Ribena, and Lucozade.

On July 31, 2012, we made a low-ball offer on GlaxoSmithKline. In exchange, the owner of GlaxoSmithKline stock paid us $80 to keep our offer on the table for a little over two weeks.

At the end of the two weeks, we didn’t buy GlaxoSmithKline, so our low-ball offer expired worthless, but we kept the $80. We earned 1.7% on the 18-day trade… an annualized return on our investment of 37.5%.

These are real trades we’ve done. The annualized returns were 21%, 32.4%, and 37.5%. Let’s put that into context.

Warren Buffett has been successful enough to earn 19.7% annualized compound returns for his shareholders over the past 48 years.

Individual trades using this simple strategy earned us returns that raced past those numbers. Will every low-ball offer have high returns like this? No. But they don’t need to. We just make steady streams of cash from routine low-ball offers.

I hope you’re beginning to see just how powerful the Banker’s Code truly is.

Learning the Language of Options

As you now know, stock owners are willing to pay us for our low-ball offers. Why? Because our offers give them flexibility. Under certain circumstances, they could sell us their stock or not. It’s their choice. Our offer gives them options.

And that, literally, is the name of the game. We’re trading options.

We’ve used the term “low-ball offer” so far. But you need to know the specific term your broker will recognize. See, in the financial world, people don’t call them “low-ball offers.” They go by a different name: put options.

Here’s a trick—you might think of it like this: You’re giving a stock owner the right to “put” his stock on you under certain circumstances.

Financial professionals call the Banker’s Code a “put option selling strategy.”

You might have heard some scary stories about options. And that’s for good reason. Some people, with no experience at all, barrel into options trading with “get rich overnight” fantasies. When that happens, it often ends badly.

That’s because the reality is that a whopping 80% of options traders lose their money. And most options strategies are very risky.

But rest assured, we don’t fall into that 80%. And what we’re doing is the safest strategy of them all.

Why? This statistic largely derives from options investors who buy options, hoping that stock prices will go to the moon and they’ll make gobs of money.

That rarely happens. Those investors are gambling. Pure and simple.

That’s not the Banker’s Code strategy. We don’t gamble. We don’t speculate. We aren’t trying to hit a home run. We just quietly and consistently earn chunks of cash on each trade by selling options. The returns snowball over time.

Remember the track record of trades we put together as of the date of this writing: 94% winning trades. 47 out of 50 have made us money. You cannot argue with the numbers.

Back to the official language of options…

As I just told you, the Banker’s Code strategy sells put options. In our Coca-Cola example, we were selling Coca-Cola share owners a put. This gave them the right, but not the obligation, to “put” their stock on us under certain circumstances. In exchange, we earned cash that’s ours to keep forever.

In our opinion, the easiest, safest way to make money with options is by selling put options.

What Is the Risk Here?

If you’re like me, I’m sure you’re thinking… What is the risk? How can I lose money?

Let’s look back to our Coca-Cola example.

In our hypothetical situation, Coca-Cola stock was trading at $40. We made our low-ball offer for $36 for a six-week period. In our example, we didn’t end up buying the Coca-Cola stock owner’s shares. Our offer expired worthless, so we pocketed the money we made for the offer.

But sometimes, the price of a stock we’re making an offer on will fall just below our offer price. In these situations, the owner will ask us to buy his stock per our agreement. Depending on the price you choose as your low-ball offer, the likelihood of this happening could be very small. Nevertheless, it does happen sometimes.

If someone accepts your low-ball offer and you end up buying a stock, the only way you would lose money is if you agreed to buy Coca-Cola (in our example) at $36, but the current market price is now, say, $32.

In this case, you would be paying $4 more per share than the current market value of the stock. Your “loss” would happen if you immediately sold your Coca-Cola stock on the open market. You would lose that $4-per-share difference between the current stock price and the price at which you bought Coca-Cola.

But let’s remember a few things:

  • First, you don’t have to sell. You would own a world-class, elite stock. I can all but guarantee you that, in time, a stock like Coca-Cola will increase in value and make you even more money.
  • Second, the top-quality companies you should make low-ball offers on typically won’t experience tremendous price drops that would leave the stock trading significantly lower than your low-ball offer.
  • Third, you’ve already partially offset any potential losses by making money selling your low-ball offer.
  • Fourth, when you own elite stocks like Coca-Cola, they pay you dividends, so you’re still generating income as you hold the stock.

In addition to all this, there’s one more thing you can do if you end up owning your low-ball offer stock. And it will earn you even more income.

What is it? It’s the opposite of the low-ball offer… it’s the “high-ball listing.”

A high-ball listing is the mirror image of the low-ball offer, except it’s the process in reverse.

Instead of offering to buy someone else’s stock, you’re now offering to sell someone your own stock. But just as in a low-ball offer, your high-ball listing will be for a specific price, and your offer will last only a specific length of time. And most importantly, you’ll earn cash making this offer.

It’s beyond the scope of this report to get into the specifics of high-ball listings, but the important thing to know is it’s another smart secret with the Bankers Code available to you if your low-ball offer is accepted.

Making Lots of Money, Bit by Bit

You might be saying to yourself, “Wait a second—making $75 on a trade doesn’t seem like a lot of money.”

You’re right.

$75 all by itself isn’t a great deal of money. But we do this every week, in up markets, down markets, and sideways markets. This money adds up, and even better, it adds up safely.

Look at some of these returns from people who have used the Bankers Code strategy:

  • Over the course of three months, Y.F. collected $5,000, then $7,000, then another $5,000
  • J.H made $6,500 in one month
  • T.A. collected $13,355 in two months
  • And Brian M. even made $83,000 in seven months.

Don’t let “$75” fool you. Real money is made using the Banker’s Code strategy. Remember the real returns we made on our own trades:

26.8% with American Express, 32.4% with Nike, and 37.5% with GlaxoSmithKline.

Let’s illustrate the kind of money that’s possible with these returns.

Let’s assume you start with $20,000 for use in the Banker’s Code strategy. And let’s be very conservative and assume that we earn just half of the smallest of the percentage returns above. That would be the 13% (half the return from the American Express).

If you reinvest your earnings back into the strategy, compounded at 13% year after year, how much money do you think that $20,000 would grow to at the end of 15 years?


After 25 years, that turns $20,000 into $424,611. And after 35 years into $1,441,370.

The Banker’s Code strategy makes money, bit by bit, slowly but surely. And if you keep investing your earnings back into the program, over time, it blossoms into a fortune.

Keep in mind, we do this safely. We’re not taking huge risks here.

In baseball terminology, the Banker’s Code tries to hit only “singles”. We want just to get on base. Because we know, over time, consistent singles lead to lots of runs scored. See, we’re not like the average investor who swings for home runs every time.

“Why invest in a boring, old, ‘safe’ stock when this red-hot biotech is soaring? It has three new products that will revolutionize the industry! I’ve heard it may quadruple my money in the next eight months!”

Too many naïve investors chase after this illusion, constantly searching out the latest “get rich quick” stock pick. It rarely ends well. And all the while, we’re in the background, making money… bit by bit… dollar by dollar… turning it into a fortune.

Our strategy is safe. Our strategy is conservative. But best of all, our strategy works.

I keep pointing back to our track record, because it’s the best way I know to prove to you what the Banker’s Code can do: We made money on 47 out of 50 trades.

In fact, Shelli S. wrote to us and said:

2012 was a year of exponential understanding in making low-ball offers by selling puts.

In looking back at my account for 2012 (which is the first year I have complete stats for), I got a 19% ROI. I simply took the funds at the beginning of the year and my account value at the end of the year to look at the difference.

And then Marilyn O. also told us:

The account I use for my Banker’s Code gained 14.6% for the year.

Individually, my trades look better than my net for the year, and most were in range from 19-25%. The highest return, YHOO, was 50%, and the lowest, KO, was 13%.

I suggest you think of the Banker’s Code as a steady, reliable second income. That kind of return is incredibly attractive in any market—but even more so today, as government bonds and savings accounts are paying close to nothing.

I hope you’ll give it a chance to see just how powerful it is.

[Ed. Note: Tom Dyson is the publisher of Palm Beach Letter. Tom bought his first stock when he was 11 years old. He has been studying the art of investing and speculating ever since. Tom graduated from the University of Nottingham, in the United Kingdom. He’s a member of the Chartered Institute of Management Accountants, one of Britain’s top accounting bodies. He has also worked for bond trading desks at Salomon Brothers and Citigroup.

For the past six years, Tom has been researching and writing about conservative income investments. After testing one strategy for over 5 years, he is now training people on his “Express Income” strategy. Learn more here.]