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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Vol who wrote (7864)	7/11/1998 12:31:00 AM
From: EJ	Read Replies (1) \| Respond to of 14162

I don't recommend trading OEX index options short. In 1985 -- prior to the new margin rules after the "October Crash" -- I exclusively traded OEX Index options. My strategy was to Sell 20-40 out of the money calls and an equal number of out of the money puts with 3 weeks or less until expiration. While I made good money with this strategy, if the market moves significantly against you it can wipe you out. If you buy protective calls or puts it significantly reduces the return. My conclusion is to not avoid the "easy money" trap that writing naked positions "appear" to have. If your married with any assets...never trade naked. It's simply not worth the risk. EJA