Options Boot Camp

Basic Training: The Wheel Trade A great trade for novice options traders. Our friends at RCM call this the "triple income trade" or "the wheel of fun." What is it? Write a put to get long equity, then immediately write a call to sell equity. When should you use it? When should you not use it? This is a great way to add some extra bang to your covered call trades. Mail Call: Fabulous questions, insightful answers. Question from Bit Tim: You recommend closing out your shorts when they go your way. Do you advise factoring the closing price of the trade in to your calculations when writing options? For example - write a put for $.30, but know at the onset that you will only collect $.25, because you will close it out for $.05. If more people did that at the outset, they might be less reluctant to close out their winner for a profit. Question from Jack - I know you guys are not tax advisors, and so nothing you say can be taken as certain in any answer to this question. I am a small time trader, and at the moment