I heard covered call selling was safe and produces excellent income

Discussion in 'Options' started by stock777, Oct 2, 2008.

  1. lol.
  2. It is NOT safe.

    It is a <b>little bit</b> safer than holding stock without writing those calls.

    It produces excellent income only when the markets are neutral or rising.

    It's a losing strategy when the markets are falling.

    There are safer strategies you can use. But if you a truly a beginner <i>and </i> you want a bullish position, writing covered calls is a good way to learn how options work.

    Just don't do too many at one time.

  3. rickf



    Useless in this market -- the 'cushion' is nothing compared to the major moves we're seeing.

    Wait for a more sideways-to-slightly-bullish market before doing CCs......
  4. with the vix so high, if you've bought stocks where you think they can't go much lower a covered call strat might collect good premiums
  5. this should have remained a 1 post thread. His point was that you might have gotten KILLED with the 'safe' and income producing cc strategy
  6. covered calls = selling puts.

    simple as that.

    same crowd that said long term investing was valid pimps covered calls.

  7. You are a bit harsh. Some people believe in holding for the long term. They are misguided and behind the times. But you shouldn't hate them so much.