[RocketManJames]

Not sure if this is what you're looking for, but I'll tell you what (little) I've done with options.

I am almost exclusively on the sell-side when it comes to options. I will write covered calls on positions that I want to hold longer-term, but I feel the stock is overheated and may pull-back. I will also sell cash-secured puts on stocks that I want to buy at a discounted price.

For example, say that I want to buy QCOM at 39.50 or better. The basic approach is to put in a limit order to buy the stock at 39.50. Another approach is to simply sell the December 40 puts for 0.50.

Pros of using limit approach:
If stock dips to 39.50 then rallies, you're in and you win. But, had you used the put method, you'd only collect the premiums, which is likely to be less profitable than had you owned the stock.

Cons of limit approach:
In a sense, your cash is tied up. If you have a margin account, then this might be less of an issue.

Pros of using put method:
If the stock doesn't close below the strike price, then you've pocketed the premiums, which is a decent yield for a month. If the stock closes between 39.51 and 39.95 (or so), then you'd have gotten stock at the price you wanted, that using the basic approach would not have gotten you.

Cons of using put method:
You are tied into the stock. So, if bad news comes out overnight, you're basically gonna get stuck with the stock, whereas if you had done it via limit order, you could cancel it (or get the stock at a big discount to your target price). Options method is more expensive also, in terms of transaction costs.

I know there are some posters that work directly in the options field, and I'm sure what I've said above is probably high-risk (and maybe even unwise), but you asked, and that's what I do when it comes to options.

It's really rare that I trade spreads, for me being a smaller player, I'd get killed by transaction costs.

This said, I don't recklessly sell cash-secured puts. I will only use this method after I've done my research on a given company, and I really do want to buy the stock, but only at a certain price that isn't quite available for me in the market. Overall, this particular method has worked okay for me. Not great, but pretty well.

-RMJ