On Dec 2, 6:43 am, wolfman <laedeketrad...[at]gmail.com> wrote:
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Joe has it right. Options are a way of enhancing your stock market
income or reducing risk.

You don't need any advice to do that. Buy stocks that are undervalued
and sell calls against those stocks. If the stock goes up in price to
above the strike, either let the call be exercised or buy the call
back. After the call expires sell a new call again.

--
Ron

beliavsky[at]aol.com wrote:

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The heaven web site offers letters endorsing the company which hint that
they are doing more than suggesting covered calls. "A nice 50% profit in
7 days" for instance.
I'd be wary as well, as wary as I'd be of any trading strategies that
imply more than the market return.

I view the covered call strategy like this:
Let's assume the market return is a bell curve (which we know it's not,
but it's my hypothetical). One can sell the return above a certain level
to shift the curve a bit higher. Example - with SPY trading tonight at
147.68, a 10% move in one year puts SPY at 162.45. The 160 call sells
for $8.65 or 5.85%. Now, if you are thinking of a return curve centered
around a 10% annual return, with a 16% or so standard deviation, you'll
see that this covered call will change that curve so that your risk of
of negative year has dropped quite a bit, S&P down 6% but you are
breaking even. But in return, you are giving up the piece of the curve
where your return is over 16% or so.

Of course a 30% down year will still burn you, and a 30% up year will
leave you wishing that you were just long, no calls at all. It's the
years where the market is moderately up that this strategy worked best.
It's interesting to note that Zvi ('Mr TIPS') Bodie suggests that if one
wants some market participation they should do it through calls, with
the bulk of one's portfolio in Gov Instruments.

Disclaimer - I do not recommend this. I am just making an observation.
JOE

On Dec 2, 7:43 am, wolfman <laedeketrad...[at]gmail.com> wrote:
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I am wary of all advisory services, more wary of those with "cashflow"
in their name, and extremely wary of those with "heaven" in their
name. There *is* some academic and investment bank research supporting
the use of option-selling strategies by investors, and you can find
some of the former by searching "volatility risk premium" at SSRN
http://papers.ssrn.com/sol3/DisplayAbstractSearch.cfm. If you become
convinced that you should be selling volatility, I'd recommend
investing in a closed end fund that does so, which you can find by
Googling "covered call closed end fund".

Any one heard of these guys ? Are their trading signals any good ? Can
anyone recommend a good options trading signal service ?