Gene;

If you want the Bible of Options there is only one book. "Options as a Strategi
c Investment" by Lawrence McMillan. Get the latest edition which is the 5th edit
ion. It will set you back $60 +- but well worth it.

Like Rodney Dangerfield, the spread gets no respect here.
First, spreads seem more profitable, hands down. For the same capital at risk, s
preads offer much-higher annualized returns. Example, the 1 August IWM 108.50
/ 108.00 put spread generates an annualized return of 153%, and $480 per $6000 o
f capital at risk. In comparison, the cash-secured IWM put (1 August, $108.50 P
@ .37) generates an annualized return of 6.91% and a net gain of $39 per $10,8
50 of capital at risk. No contest.

The greater profitability of the spread allows the investor to increase safety s
et by setting the short strike much lower than you could do with the simple put
and still make a decent profit.

The risk that the short strike might be assigned early is easily solved. If th
e investor is notified by email on all transactions, he can quickly exercise h
is long strikes and the shares gained offset the shares that must be delivered.
The broker treats this as a wash.

If early assignment is still a concern, write spreads on an index, like the Rut
, which cannot be exercised, only settled for cash at the expiration date. For e
xample, with RUT @ $1159.92, the 1 August 1080 / 1070 put spread (premiums 2.83
and 2.25 respectively) generates an annualized return of 111% and a net gain o
f $348 for $6000 of capital at risk. You can't come close to this with a simple
RUT put at the same strike, same capital at risk.