The bit in the middle goes to the anonymous people who put you and

The bit in the middle goes to the anonymous people who put you and Mr. Smith together and are seamlessly performing the transaction.Now, which option should you offer to sell to Mr Smith? December is too close and the premiums are too low So we must look at March. When you look at the list, remember you are the seller so you will get the lower of the two prices quoted Mr Smith will have to pay the higher price. Options are available at three-monthly intervals and the precise dates are published in most of the quality daily newspapers.A word of warning at this point Never write an option against a share you do not own. This would involve you in considerable risk and a lot of hassle because, through your stockbroker, you would have to make an adequate deposit of funds with the LOCH (London Option Clearing House).

So the first thing is to buy the shares and have documentary proof that you own them.Let us pretend you bought your 10,000 shares on 23 November and you paid 266p each for them. A week later, when the transaction with your broker was completed and you were the legitimate owner of the shares they had gone up to 281p.The various options available on that date, 30 November, are listed below. I am suggesting you consider writing (ie granting) through the market, the right to another investor, let’s call him Mr Smith, to buy your Bigdeal shares at the strike price (the price specified when the deal is struck).Mr Smith will pay you a premium for the opportunity to acquire your 10,000 shares and he can take up the option to purchase at any time up to the option expiry date, but he is not obliged to take it up at all. In fact, it is a form of insurance for your blue chips, protecting them against the whims of the fickle stock market and at the same time producing extra income for you.
The system involves traded options and I use some of the jargon which plagues this form of investment But brief definitions are included. For our purposes, we are interested only in traded call options, defined as “a contract which confers on the holder the right, but not the obligation, to buy a fixed quantity of underlying shares at a specific price for a limited period”.Let us assume you hold in your portfolio 10,000 shares in a fictitious FTSE 100 company, Bigdeal plc. Even when you have read the books and been on the courses it’s difficult to shake off the feeling that options are a synonym for high risk.

I have always felt that pitting one’s wits against the market by dealing in futures and options derivatives is a job for the professionals It is all too difficult for my tired old brain. But for the private investor who has a portfolio of blue-chip shares there is one use of options that is the opposite of high risk. Options, like a Spice Girl, can be scary. To start with, it is difficult to get your head around the concept, then you are faced with a new vocabulary of puts, calls, long strangles, short straddles, time value and combos You can be “in, out or at the money”. Our target is to have a million entries by next November.”Eventually, UAR expects to list not only life and personal pensions policies but also moneys due from occupational schemes and a range of savings vehicles. These will include dormant accounts at bank and building societies, shares certificates and dividends.Apparently, two per cent of the names on lists of shareholders are deceased, so the registrars are keen to clean up their lists to save costs. National Savings may also outsource their efforts to trace people who have not claimed pounds 2.8bn which some reckon is only one-tenth of what has never been claimed from all public and private institutions.Unclaimed Assets Register, Lloyds Chambers, London E1 8DF.