Selling covered calls on low cost basis stocks

[spindr0]

Quote from crgarcia:

Covered calls is a loser's game. Stocks can surge more than you may think, yet your downside risk is huge (almost as big as the stock, you only get the modest premium you got for the call to offset your loses).

Why don't you just collar stocks?

Why wear a collar when you can just spread em??

 

[exQQQQseme]

Covered call writing is a synthetic uncovered put write. Those alleged people making 5% per week writing covered calls are in deep doo doo if the stock goes down.

4Q

 

[HattieTheWitch]

Quote from crgarcia:
Covered calls is a loser's game...

Covered calls are no more a loser's game than is any other strategy.

It's all about due diligence, risk assessment, and sticking to a good plan.

Selling calls on diversified, well-chosen stocks is, IMHO, a very conservative means of wealth building.

Now, if one is looking for a stable 5% a month ROR from this strategy or any other, one is CRAZY.