8

The Use and Abuse of Spreads

How to Keep Them from Taking Your Money

Thus far we have only discussed selling options naked; however, a trader wishing to sell options like a professional may want to consider spreading as an alternative strategy. But beware: Of all the hundreds of different option-spreading strategies available, there are only a handful that we’ve found to be practical for individual investors.

Some brokers and authors in the industry are not going to like what they read in this chapter. However, our mission is to write this book in a “no bull” manner. We are not going to say outright that something doesn’t work or that a particular strategy does not have its merits. Given the right market situation, almost any strategy will ...

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