Beating the Prime

Hello,

Can someone recommend an options strategy netting ~5% per annum with minimum amount of risk? What do you think of selling near-term, out-of-the-money straddles on broad-based indices such as OEX?

Thanks,
dis

 

Covered calls and puts with a collar ...

 

deep in the money covered calls and puts, credit spreads

 

That has more risk than he seems willing to assume ...

 

why not just go with Treasuries? little less, but zero risk

 

That has less risk than what he wants ...

 

Well the first thing you might want to do is define an OTM Straddle. That should keep you busy for awhile. You sure you want to be writing options? Now OTM Strangles, now that might be something...

 

Why go through all that work for 5% return? Selling strangles is not my idea of low risk either, although you can do it for a long time without a big hit if you're lucky.

Anyone know what the numbers for metoxx's buy+collar strategy would look like? Could you really do 5 % with it?

 

Better ...

 

You are right. The correct term here is "strangle" not "straddle".