Blogging About Options

This is my 201st post, and the last for 2008.  It's been quite a year.

I had no idea how much time would be involved, (and how much I would enjoy it) when I innocently started this blog in mid-June. 

In an attempt to provide a solid background for newcomers to the option's world, I've discussed my six favorite options strategies, including writing covered calls, selling cash-secured naked puts, selling credit spreads, buying iron condors, collars and double diagonals.  Later, I added a five-part discussion on calendar spreads.

The strategy I use most often in my own trading is buying iron condors, and that's the topic that has received the most coverage in the blog.

I believe it's easiest for rookies to begin with the first two strategies mentioned, but those are riskier than the others.  In today's volatile market, those less risky strategies are the ones I recommend.

For those of you who believe the markets are not very volatile, as 2008 draws to a close – you are right – if your memory only goes back two or three months.  Today's markets are very much more volatile than they have been for a long time.  Take a look at the graph of VIX (the CBOE volatility index) for proof of that statement.

I've also shared my opinion on various topics in the news and responded to numerous questions from readers.  To me, the most enjoyable part of writing the blog is communicating directly with you.  Thus, if something is troubling you about options – if there's something you are having difficulty grasping, submit the question as a comment to any post and I'll do my best to supply a satisfactory response.

If you have a friend who wants to learn about options, be sure to send him/her to this blog.

Happy, healthy, prosperous New Year to one and all.
Mark

201

4 Responses to Blogging About Options

  1. David 12/31/2008 at 9:08 AM #

    Well since you asked…. I have been following your blog for several weeks and actually just ordered your book yesterday. I am a lawyer but have a finance background, so I have dabbled in covered calls and naked puts, as well as done a little gambling with call purchases. I’m of course finding your IC strategy intriguing and am anxious to open a new position once my paper trades go a little smoother. My main question is actually an offshoot of trading – I am wondering how you handle your tax filings considering all of the trading you do? Do you have a program that you can feed your trades into that will track realized gains and losses? Are you designated as a day trader under IRS rules? I am concerned it will be a nightmare come year-end and am just looking for something that will make things simpler. Thanks in advance – keep up the good work.

  2. Mark Wolfinger 12/31/2008 at 9:25 AM #

    David,
    Thanks for the kind words.
    My broker (InteractiveBrokers) supplies a form that includes all my trades in a format that I can simply attach to Schedule D. I have not yet figured out how to make TurboTax accept the data (maybe this year?), but that’s a very minor inconvenience.
    Other brokers offer a similar service (no cost). Because this is a potential problem for you, be certain your broker has something you can use before you begin trading too frequently.
    Software is available for purchase, but I prefer to get it free from my broker. That reduces the chance of producing errors when transferring data from the broker to the software.
    The IRS does NOT consider me to be a day trader. I almost never close a position the same day it is opened.
    Mark

  3. Bill Luby 12/31/2008 at 10:09 AM #

    Mark,
    Thanks for all you have contributed in 2008. I get your site on a daily feed and now think it is time to check out your most recent book.
    Cheers and best of luck in 2009,
    -Bill

  4. Mark Wolfinger 12/31/2008 at 10:51 AM #

    Thanks Bill,
    I read your blog daily and find that it’s full of fascinating information.
    Yes, almost everyone needs better luck in 2009.