Hi Mattocks, I wasn't sure whether a SMSF could actually write calls (I think it's due to them effectively taking a charge over the stock), but I'll assume they can for now.
Who do you write European options through? For those confused, European can only be 'exercised' at expiry; whereas American can be exercised at anytime. I remember them as E for Expiry and A for anytime.
It can be a worthwhile strategy, especially in a flat, falling or slowly rising market, if you are aware of the risks. These can include additional transaction costs and of course, missing out on upside in the stock if you get it wrong, which ends up being an opportunity cost.
The current market has been favourable for this but if things take off, it's been referred to me as 'trying to stand in front of a moving train'. The important thing is to get your 'view' right on where you think the stock will go.
Telamelo, Instalment Warrants are in simple terms a way to buy something (shares or property) on finance, but generally with limited or known risks. With shares, you may buy XX Ltd for half the price with an in-built loan providing the other half. The dividends usually go towards paying the interest with any surplus/shortfall going off/on the 'loan'. They are often traded on ASX and like any gearing - if the asset goes up, that's good; if it goes down, that's BAD. But unlike a margin loan, there are usually no margin calls, but the value could reduce to $0 if the shareprice falls enough.
