Strategy - SELL PUT (details below)

• bullish
  • very bullish
  • moderately bullish + certain that the market will not fall
  • moderately bullish + fairly certain that the market will not fall
  • bearish in immediate near-term (weeks) + bullish in longer term (months)
• bearish
• neutral
• volatile

Strategy Implementation
Put options are sold with a strike price a. If an investor is very bullish, then in-the-money puts would be sold.

Upside Potential
Profit potential is limited to the premium received. The more the option is in-the-money, the greater the premium received.

Breakeven Point at Expiry
Strike price less premium.

Downside Risk
Loss is almost unlimited ("almost" as the underlying price can not fall below zero!). High risk strategy. Potential huge losses incurred if the market crashes. [If the strategy appeals, but not the downside risk, investors may prefer a bull spread].

Margin
Always required

Comment
If the market does little, and time passes, this helps as the short position gains when the time value erodes.