I agree with Maverickz. In the end it really come down to risk management. I came from a different spectrum, however, I like to be the writer of the stock options. In my opinion, trading options is more advantageous than trading straight stock. When I started out with trading options I started out with covered call. Yes the risk and reward ratio may not seem very apetizing, but again it really depends on the risk management. Obviously if you have a small account you won't be trading stocks that are selling for $100/share. I would start out with buying stocks that are trading in the $5-$15 and sell the closest OTM Call options. Normally, I would pick the one that has relatively high IV compared to the last 52 weeks, so I would be able to collect as much premium as possible. This would equate somewhere around 5% ROI per month (return of $50 per $1000 invested every month = 60% ROI/year). And perhaps I would never hit a homerun, but I know every month I will be collecting a fix realized 'income' just for owning the stock (kinda like dividend I suppose). yes there is a risk of 30% draw down or whatever amount, but how is this differ than trading straight up stock....yes you can make 65% return, but what are the probability of this happening? the probability is probably as small as hitting the 30% draw down....Another advantage is obviously you can diversify more while collecting this fix 'income' every month. I don't do just one, I would add multiple different strategies, each only risking 2-5% of my portfolio (my risk management). I vary the strategy from short Strangle, vertical, naked, butterfly, straddle, calendar, and so on depending on how the stock is behaving. Also another aspect that I see traders might miss is ROTI = return over time per $ invested. if you get 60% return in the period of 12 months of $1000 investment that's really the same as 5% ROTI....all of us can do this easily with covered call....