Top 100 Index Options Writing Strategy
- $100,000 cash for full strategy is deposited to an investment advice margin/option account.
- Cash is held in commercial paper for margin purpose.
Through my career working as an investment advisor, I feel the need to release some of the "secret" information made available to only wealthy clients. Here is an example of what is arguably the best investment strategy available today, and used by all my clients.
Some basic understading of options trading is required to fully understand this strategy.
- Contracts are sold as high (CALL) and as low (PUT) as possible, for a minimum total premium of $7.00 per combination. (Premiums received will vary, depending on chosen strike price and volatility present at time of writing.)
- The ideal scenario is for market (OEX Index) to close below the calls and above the puts at expiration, the third Friday of each month.
- Sooner or later, one side will be "in-the-money", meaning the OEX Index is above the calls or below the puts written, at or near expiration.
- When the position is "in-the-money", we "roll-out" the losing position (write new contracts two months out) to recapture all or as much of the cost as possible. One side will always win or expire worthless (when normal spread exists).
- There is a transaction cost for each trade. If the value of the trade is over $700 the maximum trade cost (for 2-3 contracts) is $110 with a broker. If the trade value is below $700, the cost is 10% of trade value to a minimum $25.50.
Read further on option trading to make the best use of this information and get it working for you!