That loss point is at expiration. Drop before then affects your margin and peace of mind. IV increase also adds a bit to the margin pain. A problem with ITM CC's that people can be unaware of is that the position starts to lose immediately as the UL drops. If it keeps dropping, the loss accrues (the option delta gain doesn't keep up with UL's delta loss). By the time you reach the strike, the option's TP has inflated and there's a decent paper loss... or at least far more than the writer thought since that's break even. No problem if it levels off and that TP decays but if the UL continues down, you may never have seen a price level where you could have taken a small gain or modest loss. Even worse if IV increased because of the large drop.