WRITING TRADED OPTIONS for income

I only use IG, so I do not compare prices, but I would be amazed if even small anomolies were on offer. The SB's use pricing models very similar to LIFFE, so whilst they are wider, and sometimes skewed(mainly to the low side)I do not ever recall seeing a situation where an instant profit could be made.

The IT I'm looking at will track the FTSE to a certain extent; it's top holdings are all constituents, however I'm more interested in direction. I'm relatively happy running a short FTSE position at these levels, but if it continues it's relentless rise I will want to cover some of it. The stock I'm looking at would give a return of about 8.5% per annum, if dividends are maintained at their current level, and that the portfolio also maintains it's value. That gives me some leeway, and should the market continue to rise, the IT should also rise with it. If I can continue to take further premium along the way I will be happy.

tiltonboy