Non-directional strategies for 11-12% yearly return

Discussion in 'Options' started by short&naked, Dec 7, 2011.

  1. MTE

    MTE

    There is no best approach, and noone is gonna just spill the beans here, if you know what I mean.
     
  2. IVtrader

    IVtrader

    respectfully you must not have researched the capital markets very much. there are dividend paying stocks paying 11-12% and they could have easily be found with 10 minutes using google

    for example, NRGY, selling at a discount, current will get you around 11%, paid quarterly
     
  3. Ummmm, how is that non-directional?
     
  4. 11-12% assumes non-equity like risk. The was of course implied.
    Also, what does 11% do of me if the stock gets halved in price or worse? Please check your facts and do your own research before giving faulty advice and accusing others of not doing the same.
     
  5. soo.... you will accept free help but it better be REALLY GOOD
     
  6. Gambit

    Gambit

    LOL! +1

    OP needs to head over to the CBOE site. You can read their studies on options selling. They claim equity like returns with lower volatility. You can lever that up a little bit to get the returns you want.
     
  7. Well, if you want a steady 11% per year return and you realize that you are taking on some large hidden risks in return for nice and steady looking returns, you could:

    1. Sell calls and puts outside the market just far enough to get a 0.873459% return each month from the premiums.

    2. Pray that the market doesn't move outside your strangle and blow you up.

    Presumably, shops like LJM do a little more analysis than that and allow some variability in returns.
     
  8. risk=reward. you're gonna have to put some risk into these markets if you want to make money. It doesn't just spit out 10%+ returns annually without you putting some money on the line for risk. Strong companies with healthy dividends is a good idea, presumably if you have a good company, you won't get halved in the stock and you'll collect an income. But then again you want non equity movement and non directional. Options will get you a return, but it takes one bad move in selling options to really get burned.
     
  9. Atticus had some good comments in the thread "generating $1000/month on $150k" (I think he started 10 or so pages in to the thread). If I recall, his basic approach was a buy/write strategy on a diversified basket of low-volatility stocks while maintaining an insurance policy against market meltdown by purchasing OTM VIX spreads.
    Might be worth a look...
     
    #10     Dec 9, 2011