Strategy - SELL CALL (details below)

• bullish
• bearish
  • very bearish
  • certain that the market will not rise
  • moderately bearish + fairly certain that the market will not rise
  • flat or mod. bullish in near-term (weeks) + bearish in longer term (months)
  • hold stock and bearish
• neutral
• volatile

Strategy Implementation
Call option is sold with a strike price of a. If the investor is very certain of his view then at-the-money options should be sold, if less certain, then out-of-the-money ones should be sold.

Upside Potential
Limited to the premium received - received if the market at expiry is at, or below, the option strike.

Downside Risk
Unlimited. Losses on the position will worsen as the market rises. [If the investor likes the idea of the strategy, but not the downside risk, they might be interested in a bear 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