Originally Posted by Seneca Pilot

Agree with you completely:


When using spreads you can accomplish three things.

Efficient use of capital: Reducing that 300K to 12K while having the ability to make 60% of the gain allows many more trades.

Capped Risk: Despite arguments to the contrary naked options can empty your account unless you are in front of the computer twenty four hours per day with your finger on the exit trigger.

Non directional plays: You can use condors, etc. to spread both sides of the price and make substantial gains while the market goes nowhere.

Naked options use too much capital for too little gain compared to limited risk plays. 10% per month is very doable with Condors.