Has anyone analyzed covered call writing results?

Quote from Eliot Hosewater:

I'm sure this has been discussed somewhere but I haven't seen it.

Let's say you decide on a strategy to write covered calls on the QQQQ. You buy them today at 39.40 and sell Jun 40 calls at .60. In June it has gone to 40.50 so you get called. You got the premium of .60 plus .60 on the underlying. You then buy again at 40.50, so you use up 1.10 of your 1.20 profit. If you keep doing this with the same results you will wind up chasing the QQQQ's up with little or no profit after commisions.

Has anyone studied this? If so, have they analyzed what happens when this is applied to different stocks?

Say instead of QQQQ you start with stock XYZ. You make a little profit but decide next time to buy stock ABC, which has just increased by a similar amount. Is the result the same?

I'm just wondering if you actually make anyting with this strategy in a slowly rising market.
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I think most people doing buy-writes would sell further than the next month out. They might go out three or four months, so they would be taking in more premium. Also, they probably would not sit there and get assigned. They would either buy them back or roll them up.
 
Have you considered only selling covered calls during the day, or last couple days, of expiration. Calls are so overpriced considering the fact that they will expire worthless very soon.

If I do covered calls, I'd do something like this. But volitality has been much lowered now than it was a couple years ago and calls are much cheaper, which make this strategy somewhat less effective.
 
Covered calls will not give you an inherent advantage in making money.

If you already have a stock that you would like to keep for fundamental reasons, consider writing out of the money calls when the IV for the stock is at a relatively high level compared to the past and you think that the stock is currently overbought. Write calls with less than two months to expiry.

If you don¢t own the stock the strategy of buying the stock and selling the call is equivalent to the strategy of selling a put with the same strike. So in that case spot a stock that you would like to own for fundamental reasons and wait for a market correction with a jump in IV. Sell OTM naked puts for the amount of stock that you want to own if assigned.

Don¢t just randomly write options all of the time.
 
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