Thanks Gloveski - I will definitely take a copy and try to...

Thanks Gloveski - I will definitely take a copy and try to practice the method. I appreciate your thoughts on the writing strategy - you have a point.

Your post really made me analyse about what I am am trying to achieve - thanks again. I have been really working on options for about a month now and I am feeling a bit overwhelmed - so as with trading shares I realise I need a plan.

I've set myself some pretty loose goals now, it might give me more focus. I'd welcome ideas to think about for any part.

So in brief - my main aim at this stage is to come up with a viable, tested, practical trading plan for options before I start using my hard earned.

I think this plan might be 3 pronged -

Goal 1. Use part of capital to make a steady monthly minimum income (2.5% minimum will be enough) - using your strategy or another one, maybe the writing calls and then selling naked puts (if the calls exercised) in alternate months.

To learn/do: Work out the best way to test each strategy on underlying instruments and decide on a shortlist(I'm thinking top 50 shares, ETF's for testing and also indices - Aussie for now).

Goal 2. Reduce risk and exposure of my capital by replacing my shares with options until a stable trend reestablishes itself. Then I'll have more powder dry for the next rally.

To learn/do: Decide on best method of doing this.
Learn a LOT more about option strategies to optimise,protect or repair my positions.
Decide which tools/resources I am going to use.

This is an interesting article/writer who suggests buying in the money options to replace shares.

http://tycoonreport.tycoonresearch.com/articles/533897292/use-this-strategy-to-generate-extra-income-each-month

Goal 3.

Use 5% maximum of capital to create my slush fund for all the good things I like :)

Strategy: to use what I learn in achieving the first 2 goals and apply it to the shorter term maybe -

To Learn/do: Lots more learning!!