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Microcap & Penny Stocks : Tonto and Janice Teach Investing

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To: Janice Shell who wrote (154)3/28/1999 6:16:00 PM
From: Henry Volquardsen  Read Replies (1) of 302
 
Let's face it: the BEST way to make money in options is to do naked writes. As long as you don't make an Awful Mistake...

there is an old saying among market makers 'options are to be sold, not bought'.

Naked writes are the way to go if one understands what they are doing. One way to help reduce the risk of writing options is to take a portfolio approach. Select a diverse group of stocks that you can follow and learn their rhythms. Try to select a group that includes both stocks you like and those you might consider shorting. Write both puts and calls if possible. If you diverse your option portfolio you will reduce the odds of taking a really bad hit and increase your chances of generating good returns.
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