Chapter 2. Income Strategies
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 ...