That is the topic is this video. In it I go over how to get started, how to calculate how much money you need to get started, what you can make, and some simple guidelines I wish I knew when I got started.

Click here to view the embedded video.

I Wanna Be A Covered Call Trader is a post from Option Selling.
To learn how you too can earn 8-12% Monthly Returns Safely and Conservatively check out OptionGenius.com

Options for LEAPS are traditionally created with expiration cycles of three months, six months or nine months, with no option term exceeding a year’s worth of time.  While there might be some exceptions now, traditional LEAPS are still the majority.  LEAPS are relatively new to the market and may extend as long as 2-3 years out.  As is the general rule, the farther away the expiration date, the more expensive the option is.  LEAPS are also available for indices now, as opposed to merely equities.

LEAPS are popular tools of investors who hope to reduce their risks.  The LEAPS strategy makes it possible for investors to manage risk and protect pricing by buying out put protection.  Obviously, using LEAPS does not guarantee success, as nothing in the market is ever 100% sure.  However, having more time on your contract for the position to work is a positive.

There are also other advantages to using LEAPS.  LEAPS lets you take an alternative route to stock ownership.  It allows you to benefit from price rises, while also risking less capital, as opposed to ordinary share-purchasing.  If the stock price increases to a level that is higher than the exercise price stated by the LEAPS contract, then the buyer has the right to purchase shares below the market price.  Then the investor can turn around and sell back the LEAPS calls for a much higher profit.

The buyer is also able to use these calls to diversify his or her portfolio.  Historically speaking, the market tends to reward investors in the long-term.  Most investors do not purchase shares in every single company they follow.  They carefully select according to market performance and research.  What’s nice about a LEAPS call is that once bought you have the right to purchase shares of stock at a specified period of time—or even up to three years into the future. 

LEAPS contracts also allow investors the opportunity to hedge their current stock holdings.  So if you are thinking about potential price drops on stock that you own, know that LEAPS options let you sell the underlying product at the strike price.  You can also do this at any time, up to the expiration date.

Are there any negatives to using LEAPS options?  Risks are limited, but still existent.  You have to invest the price you paid for the position.  If you are an uncovered seller of LEAPS calls or puts there is actually unlimited risk.  The risk generally varies according to what strategy you take.

It is important for investors to fully understand fully the risk of LEAPS as well as how this financial tool can work in your favor.  If you are willing to stick around for the long-haul, you may find LEAPS very beneficial.

One way to use LEAPS is in a covered call in exchange for stock. You can buy a LEAPS online for expiration in Jan a year or two away and sell current month options against it. The current month option will provide monthly income while the stock may appreciate in value. Thus, the value of the LEAPS will go up, while you make money month after month.

What is a LEAPS Option? is a post from Option Selling.
To learn how you too can earn 8-12% Monthly Returns Safely and Conservatively check out OptionGenius.com

The good news is the more options are traded the more liquidity they will have and the more competition among brokers will lead to lower commissions for all of us.

here is the article:

http://online.wsj.com/article/SB125202073403184971.html?ru=yahoo&mod=yahoo_hs#articleTabs%3Darticle

By JEFF D. OPDYKE

Most investors are hoping stock prices push higher. The short-sellers want stocks to sink lower. And then there is Marlene Sackheim: She hopes the market goes nowhere.

The 57-year-old chief financial officer of her husband’s pain-management clinic in Pensacola, Fla., trades options for herself and other family members. Her preferred strategy — colorfully dubbed a naked strangle — rakes in the money when the Standard & Poor’s 500-stock index has no big swings. That has been tough in a year when stocks first tumbled and then soared. Still, by constantly adjusting her positions, Ms. Sackheim says she is “having a great year so far.”

Whether seeking income, mitigating risk or just speculating on price movements, investors are trading options in record numbers these days. Cumulative volume on the nation’s seven options exchanges hit a record 2.4 billion contracts through the first eight months of the year, 2% higher than the same period in 2008 — though volume surged even higher last fall when the financial crisis exploded.

Of course, professional money managers account for much of the volume. But Charles Schwab Corp. found in a July survey that 47% of its “active” investors regularly trade options these days, up seven percentage points from last summer. The number of investors attending Schwab’s options-trading seminars “has grown dramatically this year,” says Randy Frederick, Schwab’s director of trading and derivatives. He has hosted seminars in more than 40 cities this year.

Options trading can be risky. Depending what side of the trade you are on, an option involves the right or obligation to buy or sell a stock or index at a certain price on or before a certain date. In the most conservative strategies, the most an investor can lose is the price of a contract, often just a few dollars. At their most speculative, options can leave investors exposed to huge losses.

Some options strategies work best in up markets, others in down. And some work best when markets go sideways. Bet wrong and you can lose big. Options traders who were betting on market stability earlier this year, “incurred some big losses” in the volatility of late February and March, says Jim Bittman, a senior instructor at the Chicago Board Options Exchange’s Options Institute. In a two-week stretch, stocks fell more than 16%, only to rise 17% days later.

Stephen Figlewski, a finance professor at New York University, formerly traded options professionally and enjoyed it. But he adds: “I’m not sure I’m any better off than having put money in a Vanguard index fund. Lots of strategies seem smart, and people can make money at it for years. But then suddenly the year their strategy fails, they lose everything they made before — and more.”

Many of the most popular options strategies today are focused on generating income. Investors sell options contracts to other investors and collect premiums in return. If the contract expires worthless — and 30% of all options contracts do — the seller keeps the premium. If the contracts end up “in the money,” the seller of the option is obligated to buy or sell the underlying shares at a predetermined price.

A popular strategy is selling covered calls. Mike Pera, a 65-year-old retiree in Eagle River, Wis., does that regularly by selling call options on stock he already owns. Selling a call is an obligation to sell shares at a certain price until a certain date.

In one recent example, Mr. Pera owned U.S. Steel Corp. at $27 a share and sold call options obligating him to sell those shares at $30 several weeks into the future. He received a premium of 50 cents per share, or $50 for each 100-share contract. U.S. Steel closed below $30 at expiration, and the options were never exercised. Mr. Pera pocketed the premium and immediately sold more calls, bringing in additional money.

“I’m not comfortable with the rapid ascent of stocks since March, so selling calls is a stream of income in a market that’s really in flux,” he says.

But he faces a risk selling calls into a market rally. Had U.S. Steel jumped to $40 a share, Mr. Pera’s profit would have been limited to $3.50 a share — the $3 price gain from $27 plus the 50-cent premium for selling the call. But he would have missed out on an extra $9.50 in potential gains because he sold his shares.

Schwab’s Mr. Frederick has been advocating another income-oriented strategy that involves selling a put. He calls it “an excellent way to ultimately own shares you’re comfortable with if the market comes down, yet bring in a little cash in the meantime.”

Say you want to own Amazon.com Inc. at a price lower than the current $78.50. You could sell a $70 put for the October expiration, giving another investor the right to sell Amazon shares to you at that price. For that, you would receive a premium of $1.41 per share.

If Amazon’s share price declines, the other investor will sell you the shares at $70. You will end up owning Amazon at an effective price of $68.59, or $70 minus the premium you already pocketed.

If Amazon doesn’t hit $70, you keep the premium and then can sell another put. The downside: Amazon’s share price soars, in which case you would have done better by buying the shares outright. And, of course, if Amazon shares fall sharply, you will take a loss, though it will be offset in part by the premium income.

More Investors Trying the Options Play : Wall Street Journal is a post from Option Selling.
To learn how you too can earn 8-12% Monthly Returns Safely and Conservatively check out OptionGenius.com