Our newsletter this week is taking a closer look at a love story that had seemed finished a while ago. But this relationship has been building back up for several years now: the “on again, off again” investor love affair with option selling programs. We last visited this peculiar love story in July of 2009 when the affair was decidedly off, with option selling programs having shed about 60% of their assets under management due mainly to losses as volatility spiked in 2007 and 2008. Many option sellers were sent packing – or at the very least sleeping on the couch – as investors burned by big losses called it quits with their one-time sweethearts.

But fast forward to the present, and we are seeing a rebound of sorts in the popularity and performance of option selling programs. After falling nearly $600 million during the financial crisis, assets under management among option selling programs focused on individual investors have risen about $250 million over the past four years. It would seem the flame has been rekindled:

Love may be a many-splendored thing, but this is one affair fraught with a history of pain. Have we seen the last of the troubled days – are we witnessing the renewal of a blissful relationship? Or is this just the 2^nd honeymoon that’s destined to end with another big blowup? Read on to find out.