O'Reilly logo

The Bible of Options Strategies: The Definitive Guide for Practical Trading Strategies by Guy Cohen

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 2. Income Strategies

Introduction

Options uniquely enable us to enhance our returns by way of combining buy/sell legs so that we can generate income on a regular basis. Income strategies are characterized typically by being short-term strategies, whereby option premium is sold on a monthly basis. Many investors generate significant percentage returns in this way, even if the underlying stock hasn't moved. Imagine collecting income when your chosen stock hasn't even moved at all.

As with all aspects of trading, it's crucial to be level-headed and not to get greedy. A 3–4% return every month is very significant when compounded to an annual rate. Would you take a 30% return on your money every year? Of course you would . . . or at least ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required