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Strategies & Market Trends : Canadian Options

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To: Kayaker who wrote (872)	3/12/1998 6:06:00 AM
From: Porter Davis	Read Replies (2) of 1598

>>I'm mostly interested in covered writing right now... Just so everyone is clear on this--buying stock and selling calls has exactly the same risk/reward profile as selling puts naked. It's funny how people view covered writing as conservative and put selling as risky. I personally believe people should trade options, that is, make a market call and take the appropriate option stance. Equity commissions will eat your profits too much. As to your GEAC question: on the face of it, trading a series with an open interest of 30 seems shaky. Any quoted market is good for at least ten contracts. Whether or not you would sell all 30 depends on a lot of things, but in general, it is much better to trade in series with large open interest. It is useful to be aware of what 'cycle' the option class is on--all options are quarterly with the condition that the front two months are always listed. For example ABX is on the Jan-Apr-Jly-Oct quarterly cycle and we currently have months 3-4-7-10. The Aprils have been listed far longer than the Marchs and generally will be better traders. Sam, I read your post several times, and I can sure agree with your comment: "man does this get confusing". I guess all I can say is that stocks move around and options move around as well. Not being critical, just couldn't find the point. Happy trading. Porter

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