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What does this spread tells us?

It depends on how much ITM my call goes. First, I mostly write farther out calls having 80% or more PoP. Second, its unusual for a mega cap stock like MSFT to go far enough beyond the 80% PoP strike that it can't be adjusted with rolling out a few times.

How is my answer baseless? Did you even read my comment "Covered Call strategy is used to supplant buy and hold strategy". Nowhere in my answer I alluded that someone should take a dive into this strategy just because a free lunch is sitting there. Covered call strategy works better when...

Get a free paper trading account from Think or Swim. That can plot the pnl diagram for you. Its much easier to visualize than the grid you posted above.

One thing that people are missing here is that BXM writes an almost ATM call. If you write a cal One thing that most people are missing here is that BXM writes an ATM (or slightly OTM) call which expires in one month. So if the market goes up (which happens quite a bit), that CALL goes ITM...

Elite Trader forum is rife with cocky members like this gentleman.

I'd like to respectfully clarify that I'm looking for suggestions over SPY and QQQs, not for learning why covered calls is bad.

That's should be fine I guess. If my goal is to buy and hold it, then writing high probability calls is just getting me a little something to reduce my cost basis.

The reason why I wanted to start with buying a market fund in the first place was to follow investing guru's advice - over a long term, market fund is always hard to beat. So I wanted to stash part of my savings there but I don't have enough to buy both 100 SPY and 100 QQQs.

If I'm getting the value of underlying appraised in the process while writing high OTM Probability calls, why is that bad?

Also adding another detail- IV for JUN 21 SPY $290 CALL - 11% IV for JUN 21 QQQ $187 CALL - 15.5%

For a strategy you can find nowhere on the internet

I know the concept but here I'm asking for strategies that have low risk to reward

All it takes is a binary event to blow through all of your support and resistance levels. Can never be so sure!

I get these OTM Probabilities from ThinkOrSwim.

That's what I realized little later in the process. ETFs do a pretty good job in shielding you from these highly volatile jumps in one stock. Although I'm into high probability spreads, I've never lost money on SPY.

If we look at Option Contracts for two of the most traded ETFs (SPY and QQQ), SPY is #1 and QQQ os #2. Both of them are fairly liquid. As of Apr 17th, SPY is trading at $289 and QQQ at $187. So QQQ is trading for about $100 less. However, if I look at "At the Money" ATM CALL Options for both...

I've been selling spreads, naked puts and iron condors for a steady stream of income. I was enjoying it until some of them blew past through the strikes and wiped off all my gains (Disney last week, LULU last month and QCOM yesterday). All of these short options were 82-85% probability OTM...

If I'm buying a straddle, I should be buying it when the IV and the price is low and selling it when the IV and its price is high. However if I'm targeting earnings, I notice that IV is anyways high for options that expire after the earnings of that stock, even if that expiration date is 2...