See, we finally agree on something. My only point has been your strategy has most of the risk of a long only portfolio with reduced reward and little protection with down markets. You will never receive the reward of those markets or stocks that exceed on the upside and will take the losses of the drops.
Read my posting again as I have added some more text invalidating your above objections. The research paper is misleading b/c it draws conclusions for the general case, not the special case. Ie. it does not differenciate. Special case here means only the select cases where the analysis is good. Ie. as with any options trade: one should trade CC (and CSP) only if the analysis promises a good result.
Thank you for everyone's advice. I am pretty good with stocks. I have been a long term buy and hold investor of them for 27 years. I actually once sold a CSP on a high beta stock, NET, and took a big loss. I will read Robert's article in the journal of financial analysts.
@shMark, you need an options scanner to find good trades for your used options strategy. Ie. this step (scanning to find good trades) is the most important step for any options strategy used. For example such an options scanner: https://marketchameleon.com/volReports/VolatilityRankings
No...Did a leap just below "in the money". I gave them one year to find the problem...With thousands of engineers (and tech people) they did it in months. They had stopped their dividend (further price drop), but I made money just on the rich premium and time decay...Very few around like that situations. When Google and Amazon dropped below $100. I did the same thing!! The Google got called away (with about a 20% profit...Yeah, it could have been over 50%, I get it). The Amazon I have written two options (covered calls) on it. I should have over a 25% profit on that one too. Yes, I loose the upside...I am willing to roll (both ways of rolling) with that. Other options, I will do way out of the money, for small income...Hoping they expire worthless. But many that expire worthless, pay a dividend. So I get my option money, and the dividend money earning (and compounding at 5% [money market fund]), earning me a good return while I still have a good quality stock. And yes, I know I was losing future upside potential...I get it. This is an example from 2019. If I recall, I locked in a annualized profit of between 12-20%...Nothing wrong with that. If a stock is close to the money (near expiration date), I will buy it back (cheaply)...Wait, then do another covered call. If the stock drops, I will cut my loses, and use them for short/long term capital losses. I try to know the tax situation in my head about major trades...
Losing the upside potential isn't my concern. It's the fast downfall with loss of value higher than earned premiums that worries me. These are fundamentally strong stocks. Of course during temporary setbacks, it makes sense to do CC's to ride out the rough periods while waiting for the stocks to come back but you never know for how long the setbacks are going to last and whether there is going to be more and further large drops in value so I guess the selection of the stock(s) is the most important. Glad you survived the Boeing 737 max 8 situation. Personally I would still never step onto a 737 max 8 ever, not until they redesign the position/size of the engine vs. the wings which is the root cause of the problem. Imo the software fix that they did is cosmetic and it's just a matter of time that it's going to create problems again.
When the CEO is an accountant, probably doesn't know what is a pitot tube for, shows how far this once proud and great aerospace company has fallen from its old days of engineering excellence.