This week, my most leveraged investment account made it back to all-time highs. The last high was set in mid-September, so to some extent, this account generally followed the market down and back.

However, from peak-to-trough, it only lost about 7 percent. That’s because my trading account uses leverage differently than most people.

Most people think of leverage as buying stocks on margin. I think there are a few times where that kind of bullishness makes sense, but most of the time, it doesn’t.

When you buy on margin, you have margin loans, which works against you. And while a margin account means you can buy up to 150% of the total cash value of your account, that’s only if things go well. When things don’t go well and a position goes against you, you have to pony up more cash, or sell out at a leveraged loss.

Instead, I rely on options. An option is like renting versus buying. I can essentially “rent” shares of stock for a fraction of the total cost. The options I tend to target when I expect a big rally tend to run about 10 percent of the cost of buying 100 shares outright (each option contract is for 100 shares). These options tend to be at least nine months away from expiration. They do tend to be a bit out-of-the-money. So if a stock was trading at $100 right now, I’d target the $110 strike price, betting on a mere 10 percent rally.

While there are more conservative ways to play options, trading in this space creates opportunities to make mid-double to low-triple digit gains. And as I find new opportunities that look worthier of my options trading dollars, I can cash out of these existing positions.

This allows for much more leverage than going on margin. For the cost of 100 shares, I can rent up to 1,000 shares, sometimes even a little more depending on the specific circumstances (and each trade is specific).

The next important factor in how this account is run has to do with its cash holdings. It typically has anywhere from 15-25 percent cash.

This does a few things. First, cash allows me to pounce on opportunities, like buying some stocks in the last week of December that I otherwise wouldn’t have been able to buy if I had already been “all-in.”

Second, I continually raise cash. No, I’m not putting outside money into this account. Besides the options trades, the bulk of the portfolio is in dividend-paying companies. And I enhance that income even further by selling covered calls on most of those positions.

Covered calls allow me to improve my returns on those existing stock positions, and avoid the worst of a market downturn. With most of the call options sold before last December’s decline now falling by the wayside, I have shares, but also more cash than I otherwise would have.

The best part of this cash generation is that I can keep adding to positions with new capital. I can even add to options trades that have gone against me—at least the ones I expect to recover. This helps lower my cost basis on my best ideas.

All told, my most aggressive investment portfolio is about 65 percent dividend-paying stocks with covered-calls on top of them, earning me about 8-12 percent per year on average. I could shoot for higher returns by selling covered calls at a price closer to where shares trade, but that would increase the risk of being called away from my dividend-payers more often.

With a 20 percent cash holding, that means the most aggressive part of my portfolio is only about 15 percent of its value. But trust me, that’s enough. With an average return of over 40 percent there, including all the trades that go bust, it’s having a meaningful impact on my portfolio without severely impacting the downside. And by rebalancing periodically, I ensure that the profits from these trades becomes the next income-producing stock holding.

What about other assets? Let’s start with bonds. With bond yields still low, and with interest rates still ticking up, anyone recommending bonds right now is guaranteeing that you’ll lose money. That may change someday, but right now, there’s still a negative return to most bonds after inflation and the taxes you pay on your nominal gains and income.

One of my income holdings is in the real estate space, but I have physical rental properties. So I don’t need much exposure to other assets in that vein as well. And with the cash flow from dividends and covered calls, as well as the occasional outsized profit from purely options trading, my leverage is based on maximizing cash flow over returns. That’s why I didn’t suffer as much as the overall market, even with a number of options positions that lost over 75 percent of their value at the trough, and why I’m back to all-time highs in this account.

This type of portfolio may not be for everyone, but it’s a nice balance between aggressive trading, long-term growth, and generates a lot of income to add fuel to future trades. The allocations I’m making here may be a nice fit for anyone looking to grow their wealth with some safety in mind.

Andrew Packer is a Senior Financial Editor with Newsmax Media. He currently writes the Insider Hotline investment advisory, serves as investment director for the Financial Braintrust, and writes the monthly newsletter Crisis Point Investor.