covered calls, or any variations of it, underperforms against simply buy & reinvest-dividends of the index. https://www.cboe.com/us/indices/dashboard/bxm/ There you can see BXM (SPX Buy Write) underperfoming vs. SPX, which doesn't even include the dividends. Replacing stocks with leaps is even worse since now you're giving up on the dividends; another way to look at it is, you're investing in companies but you have to periodically distribute part of your invested assets to stock holders...
bc we've been in a runaway bull mkt. I can name ppl with huge buy-write portfolios that know how to pick stocks and time vol and have dramatically outperformed the return of the SPX over the last 20Y. "Any variations of it" I don't think so.
well, you basically agreed with me. That you'd need to have a significant edge in timing individual names and vol to generate actual alpha.
no. You said covered calls, any variation of it, under perform. That means they are strictly inferior.
no assumptions and nothing to do with the Gordon growth model. It has to do with no arbitrage. But you know this because you know that covered calls always underperform the index with dividends reinvested.
OK, I worded it badly. Apologies for my lack of clarity, I meant any variation of simple "covered calls", explicit or synthetically.