To be fair I think Derek’s first idea is still his best – Come up with some corny varation of a sound investment strategy, write a book about it, give the book a simple yet cleaver title and then watch the “income” roll in. When the strategy fails – reapeat the process.

Why do I have a feeling Derek has his money in a well diversified portfolio, or, better yet – GICs.

Can’t wait for his next book – selling bridges in brookland.

Great board. Just wanted to say I think selling put options are fairly straight forward and not as ‘risky’ and foolish as the tone of this article and most the comments speak too. If one wants to buy the stock anyway and it’s part of porfolio trading strategy, it is less risky to follow the autors suggestion, than simply buying the stock outright. A nightmare can come with any buy and hold strategy, leveraging Reits or simply doing nothing. The main ‘catch’ is if one cannot write a cheque to cover their put writing obligations and must buy the offsetting call option instead to clear the trade, is where the losses pile up quickly and how options get a bad name. Option losses are quickly made into coffee time banter and twisted into fear mongering. For me, ensuring you want the stock anyway, being able to write a cheque if you get called out as opposed to buying the call options to ‘get out’, and trading a stock that has both liquidity in its stock and underlying options chain is really a no brainer. Selling puts is not a get rich quick scheme, as you must be able to write the cheque if called out….. which presumes you have the cash to begin with

Some books I’ve read go as far as saying don’t even bother with limit orders. If something looks good, don’t worry about a nickel in spread, or wait for a slightly better price. Those books argue you might never actually acquire a position, as you watch the stock double or triple. Admittedly, these are pretty bullish books.