Indexes vs. Individual Stocks

Here at the Option Writer we focus solely on trading options related to the major indexes. We focus on the indexes for a two major reasons. First, individual stocks always carry the risk of gaping from earnings reports, competitor’s earnings, management news, industry data, etc. With the indexes we remove this risk from our trading. Second, options on the indexes are usually more active and therefore we are able to sell option much further away from the actual market price, thereby reducing our risk. No matter how you slice it, index options are much more profitable and much less risky.