I hear covered call sellers are making a killing in this market

hmm

 

I'd say they are getting killed not making killing.

 

Yeah right

 

Yep, time for a killing, um-hmmm....

 

Covered call sellers ALWAYS make money on their calls.

It's the underlying stock that they have a problem with

 

volatility is the covered call writers best friend and VIX is at a 52 week high. Premium is rich so covered call strategies are bringing in good $$$. that doesn't mean they can keep pace with the market, however.

 

But my broker told me they were the most conservative option play.

 

Fat premium on a stock dropping is like using a bed sheet to catch an elephant. If a stock drops from $60 to $45 the $3.00 call you sold does reduce the sting a tad but the stock losses can still be significant.

 

The pump in the VIX is a case for having bought options already not sold them. The covered call crew is taking hits for the reasons already outlined. Those small premiums they took in may help a bit but the stock tanking is the real hit.

 

And on his honeymoon, he told his wife, "This won't hurt at all."