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When the stock market is irascible and hard to navigate, time arbitrage is often a good investment strategy.

By identifying stocks worthy of long-term investment, investors can use short-term trading strategies to potentially maximize gains while weathering market maelstroms.

The time arbitrage strategy is simple. Just identify stocks that have characteristics that are associated with long-term equity investments. This includes dividend yields that exceed the 10-Year Treasury bond and reasonable valuations. Then, sell downside puts on those stocks to potentially increase returns.

John Stoltzfus, Oppenheimer & Co.’s chief market strategist, has identified 18 time arbitrage candidates. They are Macquarie Infrastructure (ticker: MIC ), Ford Motor ( F ), Six Flags ( SIX ), LyondellBasell ( LYB ), Pfizer ( PFE ), Boeing ( BA ), Merck ( MRK ), Coach ( COH ), CA Inc. ( CA ), Harley-Davidson ( HOG ), Darden Restaurants ( DRI ), Lockheed Martin ( LMT ), Microsoft ( MSFT ), Watsco ( WSO ), Automatic Data Processing ( ADP ), H&R Block ( HRB ), Whirlpool ( WHR ) and American Tower ( AMT ).

While some investors will buy the stocks on his list, and hold them for three-to-five years, many increasingly only buy stocks after selling a put.

The two-step approach enables investors to get paid by the options market for agreeing to buy stock at a lower price. The risk – and it cannot be overstated – is that the stock falls far below the put strike price. Should that occur, investors must buy the stock at the strike – even if the stock is 10-points lower – or cover the put at top dollar.

Consider Microsoft (ticker: MSFT). With the stock around $51.30, investors can consider selling the October $50 put that was bid at $3.95. If the stock keeps advancing, investors get to keep the put premium. Should the stock decline, ideally just below the $50 strike, investors can buy the stock at an effective price of $46.05. The effective price is determined by subtracting the put premium from the strike ($50 - $3.95 = $46.05).

Though the strategy is attractive, investors should never sell puts if they are unwilling to buy the stock. The Microsoft put, for example, could create an expensive problem if the stock sinks. At $40, the October $50 put would trade at $10.

Michael Schwartz, Oppenheimer’s chief options strategist, says the put-sale strategy is an example of ultra-dividend yield enhancement. “The put premium is like increasing octane in fuel. It can make the car go faster, and run smoother,” Schwartz said.

STEVEN SEARS is the author of The Indomitable Investor: Why a Few Succeed in the Stock Market When Everyone Else Fails.

Comments: steve.sears@barrons.com, http://twitter.com/sm_sears