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Strategies & Market Trends : cash flow investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Bocor who wrote (93)	8/15/2012 8:17:05 AM
From: tyc:>	Respond to of 94

I share your opinions and experience., particularly when you say that most of your options expire worthless. I choose covered calls rather than naked puts, but note that covered calls have the same risk/reward profile as naked puts written with the same strike price. Moreover the selection of the strike price determines the ultimate profit on the underlying stock.... In fact my strategy is based on using the closest out-of-the-money, nearest expiring call to capture expiring time premium. It is sound advice NOT to seek profit from BUYING such calls despite the high leverage they offer, as most expire worthless. An alternative is offered by option-enhanced ETF's, particularly ZWB and ZWU, as high yielding (Canadian) instruments. I use ZWB (Canadian banks), in addition to writing calls on bank stocks myself. As ZWB does not cover 100% of underlying with calls, I even write an extra call, (but I don't recommend that to the uninitiated).