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I thought of this also but in the description there is no risk to the upside. Being long stock and short a straddle would add risk to the stock going up. The numbers might not add up (embellishing?) but I think the covered call is the key.

Good point on the margin. MSFT is around 47.6 today, the jan '05 50 calls are around 10.7. Higher volatility underlying could hit that 100% return level on margin.

You are correct on the two trades. Therefore he is doing a Leaps covered call. Buying the stock and selling a two year leaps. This has the same risk graph as a short naked put but requires two trades and is considered less risky. If it goes up, stays the same or falls less than the stock...

Looks to me as selling LEAP puts. A leap can be thirty percent of the underlying which would allow for the thirty percent low break even level. The margin required for the short puts would be approximately equal to the LEAP premiums for the hundred percent returns. Hard to believe this...

Likewise it is hard to even begin to respond with so much error in the original thought.

Or the media is simply twisting again.

I was at a Mariner's game up in the corporate box and my wife asks me if I knew the box next to us was owned by Wade Cook Financial Corporation. I said no but looked over and guess who I saw, Mr. Cook himself. I'd have to say he looked worn, probably a result of the legal battles. Wade is...

Selling premium is my stretegy, just have to be careful.

If you are looking for repairs McMillan covers at least one for every strategy in his book. The thing with options, as you probably know, there are statistical odds when going in which translates to risk reward which translates to position sizing. If the trader starts to adjust, there are...

I typically like a maxdd of less than twenty percent of equity allocation per position size. That, sharpe ratio and profit factor are major contributors to a system's viability, among others. I also think a lower win percentage is mutually inclusive with longer dd's.

People who make the case against U.S. involvement usually leave out an important point: Saddam is the one who attacked first and this is what differentiates him from other possible targets. We are not attacking Saddam because he has killed his own people with chemicals, we are not attacking...

If nations do not take the lead in disarming tirants then the risk of a nazi-like scenario increases. I'm pleased America is leading this coalition.

'Probably should listen to the consensus, if you didn't have a plan to deal with the trade if it went against you, you may want to just shut it down.

Exactly, if we head lower it will most likely increase. It is somewhat unusual for this size of ATR and the VIX this high.

The WRX and the Audi's rule the all wheel drive seen here in the states. I used to race scca with my jetta GLI 16v while in college. It was a blast. Now I drive a bmw 328i and Porsche 944 cabrio. Nice cars but I don't make it to the track much any more. I feel the speed limits are too...

Either way, this is the environment to short premium.

Good post. Yes if you are going long you have better odds at winning if theta is lower by buying further out. That is why with the market very quiet like right now some form of calendar spread will work as the near term will erode more rapidly than the long term.

You could look at the arms index. It is a decent confirmer of trend direction and magnitude of move.

CME has closing values for their options and bigcharts has options chains. HIstorical is the difficult part.

I'm sure these systems work but what i'd really like to see is a site which shows equity curves per system based on %'s.