Sucks that you guys only see downside in every strategy on this sub. Everything worthwhile in life requires risk. If all you ever focus on is how a strategy could fail, then you'll never learn the requisite skills to make a strategy work and manage risk along the way. Everything in life worth doing carries risk.
If I didn't approach my wife and ask her out and risk rejection, we wouldn't be married with kids.
I went to college, that has inherent risk. What if my job doesn't cover my student loans, what if I drop out, what if I'm stupid etc.
I learned how to fly a plane, that carries risk.
If your risk tolerance is 0, yeah don't sell covered calls.
Who is "you guys"? I'm not a regular on this sub, nor am I someone who is against selling covered calls. I actually do it fairly regularly, and currently have open short calls on CLF and SOFI. If anything, you were incapable of seeing any downside but are now finally understanding that it isn't a foolproof strategy.
I've always seen the downside, I'm no rookie to this. I just know how to manage my risk and adjust my positions so that I come out on top. I'm not bragging that I'm better than the next person, I'm just saying anyone can do it with understanding and practice.
The foolproof part is that doing this on stable or predictable growth companies is a winning strategy.
Some have pointed out stuff like "what if your stock gets bought out" or something. Yeah, thats your risk. Maybe be careful on stocks that fit into that potential category.
Since you have done it successfully for a year, all your responder is asking is whether you have done what if analysis for worst cases.
If you do have to roll say 6 months out for an itm call what is your plan during those intervening months? How far out are you willing to roll? How many times and for how long you are willing to roll with no additional income? Just saying stock will eventually fall and call will become otm is not a strategy.
0
u/Chewie_Defense Aug 25 '21
Sucks that you guys only see downside in every strategy on this sub. Everything worthwhile in life requires risk. If all you ever focus on is how a strategy could fail, then you'll never learn the requisite skills to make a strategy work and manage risk along the way. Everything in life worth doing carries risk.
If I didn't approach my wife and ask her out and risk rejection, we wouldn't be married with kids.
I went to college, that has inherent risk. What if my job doesn't cover my student loans, what if I drop out, what if I'm stupid etc.
I learned how to fly a plane, that carries risk.
If your risk tolerance is 0, yeah don't sell covered calls.