Investment club - I'm in one with some of my old friends from B-school that has a variety of holdings (stocks, small equity investment in a startup local business, loans to a couple private businesses). It's not a large portion of my portfolio. I second whoever said it's more about being able to bounce ideas off of other knowledgeable people (sometimes over a nice cocktail!) than about making a crazy ammt of money.
Options Investing - I sell covered calls on a range of investments, including index type EFTs, to juice the yield. It's always worked out relatively well for me but I sell them pretty conservatively so as to rarely cap out my potential gains....I have not been selling all that much the past few years because the market has been exploding, but in more 'normal' times I do. It's a relatively low risk form of options investing, you can limit your gains (which does carry some inherent opportunity risk) but you can't lose money (on the options portion of the investment...you can always lose money on the underlying security, but that would happen if you had sold the call or not). I sometimes sell puts to make a yield on the secured cash collateral for an investment that I'd like to make at a set/better price. Sometimes there's a stock that's trading above where I would value it but there is a lower price where I would make the investment, and the options premiums work out so that it's advantageous. This can also be particularly useful for index/total market funds. Right now VTI is trading right under 106 at the close today after yet another nice day. I have a 10k infusion of cash I'd like to make into the market. I can buy VTI today at 106 or I can sell a VTI put for a month from now for a 105 strike for around $100 after comms. If VTI goes under 105 at expiration next month I will have bought it at 104 effective (105 - 1 premium). The risk is if the market plummets perhaps VTI will only be trading at 95 by next month and I will still be forced to buy it at 104 effective...however, as the 'alternative' was buying it at 106 today I am still better off. On the flip side if VTI is at 105 or above I will not pick up the fund but I will make ~1% on my 10k for that month, or 12% annualized. As I don't expect VTI to return 12% annualized this is a reasonable proposition...though it carries the risk that VTI may go up 20% over the next year without me ever having picked up the fund. I know many on the board have adversion to using options or anything other than just buying straight index funds and letting them ride, and I wont say one way or the other is superior, but there are different ways things can be done. Options aren't inherently evil or horrible investments when used appropriately.
I very rarely BUY options of any kind, calls or puts. Extremely rarely as a speculative investment if I have a really good thesis but don't want to commit alot of capital, with the premium representing a minescule portion of my portfolio, usually on the order of a couple tenths of a percent. I would equate it more to gambling than investment for the most part.
