Without knowing specific details it seem that this strategy would depend on one's ability to pick the correct stocks
Read this book, http://www.amazon.com/Complete-Opti...JXIQ/ref=sr_1_3?ie=UTF8&qid=1323471755&sr=8-3 It makes the case for selling options on commodities instead of stock indexes as there is less crash risk.
I will link you the study in the next day or two, but new research is actually finding that low beta stocks, over the long run, are actually providing superior returns as opposed to their higher beta counterparts. Granted, it does not invalidate your point, it does give people some pause to think about chasing after "boring" mega caps which are offering consistent returns.
I agree that low beta stocks have the potential. There is another book on LEAP strategy that essentially says the same thing. However, I tested the strategy but, again, it needs particular stock picking skills and timing. So there is no much difference comparing go directly into stock instead of options (except leverage).
either investigating "managed" accounts is new to you or you understand less about the product in question than you really do. the managed accounts you are considering will not have a fixed value their "NAV" W-I-L-L fluctuate. so in practice they posed similar risk to owning a stock realizing that some stocks pose more risks than other just as some managed accounts do. I DID check my facts BEFORE posting and providing what you call "faulty" advice.