Here are the steps to our proven options-writing strategy:

• $120,000 USD is deposited to a Canaccord Capital margin/option account.
• All funds are held in a US T-Bill for margin purposes. 
• Initially, in a combination trade, 3 CALL contracts and 3 PUT contracts are written (sold) on the S&P 100 Index (OEX) two months out in duration. The following month, another 3 CALLS and 3 PUTS are written two months out.
• The strike price level chosen for the contracts are as high (for CALLS) and as low (for PUTS) as possible for a minimum total premium of $7.50 per combination.
• The ideal scenario is for the OEX to close below the CALLS and above the PUTS at expiration, the third Friday of each month.
• Eventually, one side or the other will be "in-the-money", meaning that at or near contract expiration the OEX is above the CALL strike price or below the PUT strike price.
• When a position is in-the-money, we ”roll-out” – buy back the losing position and write new contracts, with the appropriate adjustment, two months out. This recaptures all or as much of the buy back contract costs as possible. One side, however, will always expire worthless.
• A transaction cost is incurred based on the value of each trade. For trades of $700 or more, the cost is $110 (for 2/3 contracts).
• Finally, we contact the client every month before expiration and before new contracts are written to discuss the existing and new contract positions.

Please see "Strategy Risks"


Clients using the Top 100 Index Options Writing Strategy must understand the strategy and its associated potential risks and rewards. Options are not suitable for all investors, and require a higher level of investment knowledge, net worth and risk tolerance.