covered calls , page-42

Thanks for that.I like your approach to volatility but don't understand why you concentrate so much on volatility and not on time decay. Time decay is a variable in the equation that is known and easliy mapped. Therefore i guess its not a variable at all but a definite. In the last month time decay will eat up the option price regardless of volatility. Every day in the last month if the option remains OTM the option price will decline. Even if volatility increases substantially the intrinsic time value on an option will decay exponentially towards the expiry. If the share stays flat then it will eat up the option price even more. Volatility is transient and impetuous where as time decay is a solid structure to base trading around.

I agree with you that black jack isn't the ideal analogy. What i meant by being the casino is that they always make money except for the high roller that comes in and wipes them out occasionally. What if you could stop the high roller as soon as they started winning but let them go on if they continues to lose.

Anyway thanks for the discussion. Opens my mind up to different strategies.