Calls and Puts for Income Message Board

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Strategies & Market Trends : Calls and Puts for Income

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To: Robohogs who wrote (5657)	1/27/2013 1:24:12 PM
From: dealmakr	Read Replies (3) of 5891

Hi Jon, "It may sound weird, but even more than usual, I am sticking to my guns about getting at least 1% premium per month outstanding of the puts that I write." Is the 1% derived from total capital deployed if exercised or margin used or availability? Its fairly easy to get a 1% or better monthly return on maintenance margin capital used, but if things go bad, you have to be very proactive in monitoring the trade and be able to adjust it accordingly and always keep in the back of your mind the worst case possible true cost of the position if you have to come up with the dough. "That means generally that I am getting into only the riskiest situations, but at least you're getting paid for the risk in those situations. I am getting newsletters with 1% premiums for two months. Or even three months. If something goes wrong, there is no way to mitigate potential losses" It always comes down to the risk / reward profile on any trade. If you can tolerate the risks the rewards are bigger, but the opposite is true when things go the other way. Good Trading dealmakr

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