Options trading any thoughts

[StickyWicket]

"write options...options writers make money."

This is quite possibly-no offense-the worst response I've ever heard in reply to an options question. I can only liken it to "Aces win every hand." Ay-yay-yay!

I remember when I learned the basics of options back when I took my series 7 exam...hated the bastards at first, but then they clicked. Still love 'em to this day. Is it an appropriate strategy for investors? Depends upon your risk tolerance, as there are conservative options strategies and more aggressive ones. As a registered financial advisor, I have to take into account what my client's goals, net worth, experience, risk tolerance, and understanding of a wide variety of financial issues are---and I simply cannot recommend whether or not the original poster should get into options trading, as I don't have that basic information.

As the posters on this forum rely (perhaps wrongly so) on the other posters to provide them with advice, take a look at the following chart that provides you with a basic understanding of BASIC options strategies and what they are used for and what the max gain/max loss is on each type of position.

Some definitions:

Strike price:
The stated price per share for which underlying stock may be purchased (in the case of a call) or sold (in the case of a put) by the option holder upon exercise of the option contract.

Premium:
The price you will pay per option contract. (i.e.: if you buy 1 options contract for stock ABC @ $5, then $5 is the PREMIUM)

options chart

flame away at will...

Sticky [img]/images/graemlins/heart.gif[/img]

***please note that none of the information in this post construes investment advice, just some basic information and definitions on options*** [img]/images/graemlins/cool.gif[/img]

actually funds that write options are the most consistent in the industry on a month basis. i can think of at least 5-6(remember there are not many that do this) that do 20%+ yoy with only 1 monthly drawdown a yr.

here's one
http://www.iasg.com/SnapshotPT.asp?ID=753

what a nice equity curve