The Option Writer – Strategies for Selling Options

January Portfolio Return – 4.08%

Posted on 19. Jan, 2010 by Founder in Blog

The January portfolio return was once again extremely profitable for our members and marks the 12th consecutive month without ANY losing trades! Again that’s 1 WHOLE YEAR without any losing trades! If you want to start seeing these returns in your own account, SIGN UP HERE FOR A PREMIUM MEMBERSHIP.

Compared to the December portfolio, we had a total return that lower comparatively from December at 4.08% to 5.19%. Clearly we don’t really care if we increase or decrease our monthly returns as long as we hit our 3% profit goal – which we are beating nearly each month. In addition, we showed once again that even in the face of a major market moves higher and extreme volatility, selling options with out P.O.T.S system still produced great profits.

To re-cap this month’s income, let’s look at what we made vs. our required investments (in margin). Here are the positions we had with corresponding PROFIT/INVESTMENT and RETURN:

DIA 108 CALL – $53/$1,221 = 4.34% Return

DIA 110 CALL – $55/$1,351 = 4.07% Return

IWM 66 CALL - $30/$595 = 5.04% Return

IWM 42 PUT – $18/$419 = 4.29% Return

QQQQ 35 PUT – $6/$382 = 1.57% Return

As we said earlier, we did not have to close out any positions this month at a loss. This just goes to show everyone that by writing options, you are basically forcing the indexes to make dramatic moves in a very short time frame. And since we have positions on BOTH sides of the market (Puts and Calls), you are guaranteed to make money on at least one side of the trade every time – or both sides like we do every month.

With regard to TOTAL INCOME and RETURN, the January portfolio produced $162 of total income (double from last month) after investing just $3,968 in margin. That means we saw a total portfolio return of 4.08% this month. As we usually point out, our calculations assume that you enter just 1 (ONE) contract for each trading alert – i.e. a total of 5 contracts for the month. Those members with a higher capital base should be entering multiple contract positions each week.

***Even if you factor in a 1% comission for the month our return would still produce annualized returns of over 35% per year***

Currently we have a fully invested 2010 February income portfolio and are about to begin THIS WEEK building the March income portfolio. The outlook for both of these portfolios is extremely positive right now as we are still writing options far away from the market’s current price.

NASDAQ Target Before Major Resistance

Posted on 19. Jul, 2009 by Founder in Blog

I spent most of my time earlier this morning looking over my hundreds of charts trying to get some feeling of the market after last week’s crazy actions. Of course nothing is as clear as I would like it to be but that’s why most people can’t make money trading right? I mean if it was crystal clear then everyone would be on the right side. However, the general theme I found was this: there is still room to move higher. Even in the fact of ridiculous pressure on the economic front as well as job front, the markets were resilient last week. Whether you agree with the move or not, we have to realize that there actually may be more room above us.

Now my word of caution: don’t get too crazy long. While I think things could creep higher over the next week, we are entering MAJOR resistance zones. Per the NASDAQ, another significant move higher next week is still possible. BUT – 2,000 is the 50% retracement level from the top of the market back in 2007 – i.e. the MOST important and strongest retracement level. In addition, the same 2,000 level has been major support in the past which means it will be even harder to break. Even with all the recent strength it’s looking pretty toppy to me. I’ll let you all take from this what you will – these are just my thoughts using the long term charts.

Regardless of which side you choose to align yourself on in the coming weeks. Understand that if you buy options you are either going to be dead right or DEAD WRONG. It’s a 50/50 chance you are taking and if you feel that risky then go ahead and knock your socks off. We’ll just keep collecting small profits each day regardless of market direction.

W. Buffett Uses Our Strategy

Posted on 01. Jun, 2009 by Founder in Blog

It’s absolutely true and we are going to prove it to you here. Warren Buffett is a U.S. investor, businessman, and philanthropist. He is far and away one of the most successful investors in history, the largest shareholder and C.E.O. of Berkshire Hathaway, and is currently ranked by Forbes as the richest person in the world. There is no doubt that the “Oracle of Omaha” is one of the most recognizable and trusted names in the investment world.

But, it may come as a surprise to most of you that Warren Buffett uses the exact same strategy that we use here at the Option Writer. In fact, his company Berkshire Hathaway has disclosed publicly every single quarter that they write index options for income. Here’s what they say: 

“Berkshire has written equity index put option contracts on four major equity indexes including three indexes outside of the United States.”

Don’t you think that if the richest man in the world is writing options, you should be doing the exact same thing? We do. That’s why we choose to this option strategy over any other.

To prove that Warren Buffett and Berkshire Hathaway use the same option strategy, we have provided direction links to the quarterly and annual reports on the Berkshire website below:

1st Quarter 2009 Report – Page 10, Paragraph 1

2008 Annual Report – Page 45, Paragraph 2

What Do You Get With A Membership?

Posted on 01. Apr, 2008 by Founder in Blog

The Option Writer offers an extremely affordable and realistic membership. There are no Gold or Silver membership levels – everyone is equal around here. With that, a membership to Option Writer includes:

• Trading Alerts - As a member you will instant access to all of our past and current option trades with complete analysis from profit potential, capital requirements, risk probabilities, etc.. 
• Option Writer Education – A complete set of educational tools to help you understand how our strategy works, implementation, and risk management. Whether your a beginner or veteran, our education series will help make you a more profitable investor.
• Live Updates - The second we make a new trade you will be able to view the complete trade analysis and specific market commentary. Other sites make you for a weekly newsletter – we provide it in real-time!
• Market Strategy – Only members get top secret access to our market commentary and outlook. This inside perspective from top traders gives you the edge you need.
• Auto-Trading - As soon as we post a trade, it gets executed in your account. You never have to worry about missing a trade or entering a trade incorrectly – it’s all done for you. See which brokers offer this premium service.
• “Too Good To Pass Up” Trades – Every now and then the markets present a trading opportunity that is “too good to pass up.” If this happens, we will alert members to the amazing trade immediately. 
• Referral Program – Our members love our strategy and love to refer their friends, family, and co-works to us all the time. So we feel that you should earn referral income for being such great marketers. Earn 20% for each person you refer and 15% for each person they refer after you. Plus, view LIVE stats on your affiliate links and banners from the member’s area.
• Reliable and Fast Support - We are here for you! Therefore, ask us any question about a trade, our market outlook, or our strategy. New trader or professional, we will help answer any of your questions. Even if you don’t have questions, we always like to hear from our members, so drop us a line from time to time.

As with any great investment, we believe that the ture value of a membership is worth much more than it’s cost.

Click On The PDF Image Below To View A Sample Trade