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Strategies & Market Trends : Advanced Option Strategies -- Ignore unavailable to you. Want to Upgrade?

To: RBane who wrote (212)	9/10/1998 11:34:00 PM
From: EJ	Respond to of 355

Ron, It simply boils down to your win/loss percent. The closer you write the spread to the trading price the more times you will lose...but as your example shows you will lose a smaller percent of what you would make if your position is a winner. That's the trade off in its simplist form. I am having great success writing the spreads out-of-the money. I try to go as far as possible so that I have a high percentage of winners. However, I am the first to agree that no one system works and that to be ultimately successful in the long run you have to remain disciplined and flexible (ie, I may write some closer spreads from time to time.) Cordially, Eric