WRITING TRADED OPTIONS for income

tiltonboy

yeah i considered short dated on the grounds that when the correction comes u would be in a better position having done that,but went for far dated because

a) i wanted a decent time premium which was only available far dated, and i am happy ot push it towards expiry as i am happy with the overall profit now in the bag

b) one of the disadvantages of using (real) options for a short position is you get to pay comission on the intrinsic value as well. to open a ITM call at 570 points cost me £85 in commission plus a few points spread. if i got to do that 3 or 4 more times by sept that would be £400 down the drain.

it may well be different if you use IG as obviously there is no commssion, but they must be getting it through the spread? what sort of spread did they give for ITM options?

as a point of comparison on friday i was quoted 570-580 by a marketmaker. however when i said deal at 570 (cant be arsed with limit orders for a one off if you need to do the deal) he came back and said i had sold at 573. dealer said he had bettered the spread , but it could be the ftse had moved 3 or 4 points while i was on the phone.

regards