jonreagan

Thursday's Options Report: Emerging Markets ETF Battered After Assassination

Yeah, "proof read you copy", damn it!

GE Covered Calls: Shelter From A Stormy Market

I invest primarily in LEAPS (Long Term Equity Anticipation Securities), which are basically options with a longer maturity....in this case, the writer mentions Jan.'09. And I say "invest" rather than trade, because of the longer term; it's less risky than short term options, because it gives your strategy more time to come to materialize. That "time value" makes them somewhat more expensive, but your paying for the lowered risk. I think of LEAPS as a "hybrid" instrument, having some of the features of both stock and options.

Lately they've been more challenging (hasn't everything!), but I find that if you watch them carefully and bail as soon as the indicators go South (e.g., Goldman Sachs), LEAPS offer the best combination of risk/return....heads you win, tails, you don't lose. While I agree with the author that covered calls on GE is a viable strategy, you do have to lay out a lot of cash to buy shares of stock. The leverage/increased ROI feature of LEAPS makes them pretty lucrative.

As to writing them, Scottrade has an excellent Options platform. OIC (Options Industry Council) is probably the best source of information on this topic.