"Options for enhancing returns" by Bud Haslett of Write Capital Management

One of the most exciting moments of his life was when the Chicago Board Options Exchange introduced its S&P 500 BuyWrite Index (BXM) on April 11, 2002.

That was according to Bud Haslett of Write Capital Management, when he addressed the Boston Security Analysts Society on "Options for Enhancing Returns" on April 24, 2006.

A covered call strategy using the BXM would have produced returns similar to the S&P 500 with one-third less risk (as measured by standard deviation) over the period June 1, 1988 to December 30, 2005, said Haslett. Of course, this is a good time to remember that "past performance is not a guarantee of future returns."

Haslett emphasized that there are pros and cons to every investment strategy using options. Even a so-called "no-cash collar," where you'd receive $1 for writing a call and pay $1 for a put isn't without costs, he said. In that case you're sacrificing upside return potential on the stock.