1. Setting the Ground Rules

In any discussion of an investment strategy, you begin with a series of assumptions. Your assumptions tie into your conservative profile: You have prequalified the stock of a limited number of companies on the basis of a short list of solid fundamentals, essential in stock selection; you believe these stocks will rise in value over time; you would be happy to buy more shares; and a finite number of companies meet your standards. We have identified ten companies that make up a model portfolio, to illustrate the options strategies in this book. These serve as examples of companies that meet a few basic criteria for picking companies and their stocks, as candidates for conservative options trading.

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