So... you're holding a stock @ $50 with a written call @$60. You get called away @$60 and immediately rebuy @$60 and write a new call @$70. Messy logistics, but where's the downside performance hit?
The stock might next drops to $40, so next month you sell call @ $50, stock called away @ $51. You bought stock back @ $60 and sold it @ $40 + some collect small premium per buy-write strategy.... So you lost on net stock purchase. How do I know? Did that back in 2013 on my long term holdings.
If you follow the script, you won't buy back at $70. You immediately buy back at the then market ~$60.
But aren't you still no worse off then if you'd held the stock through the decline... plus you have collected premium... ?? Seems to me that if somebody were going to hold a portfolio "through thick and thin", he'd be writing calls all the time.
Yes, first lesson I learned: My counter parties are no as dumb as me. No, they don't hand over free money to me, in fact, they usually take money from me because they need my money to stay in business.
Stupid? How could receiving consistent additional income on a portfolio you hold reduce your returns? Perhaps you could grace us with your wisdom...