The majority of my portfolio uses a passive Index / Couch Potato based methodology.
But, in about 20% of my portfolio, I utilize Options.
I execute this active strategy in two ways, to enhance my risk/reward.
1. In my registered account (TFSA/RRSP),
I buy options as a Stock Replacement strategy. In this manner, I can diversify among more securities than if I were to purchase the underlying stocks directly.
2. In my non-registered account,
I sell options with the goal of obtaining option premium income that is taxed favourably as capital gains.
In future posts, I’ll detail these strategies further.