Thoughts on allocating 10% of my portfolio to covered calls so i don't have to work at Wendys any more?
I learned about covered calls from a comment on WSB saying that becoming the casino instead of gambling is the most profitable thing they've ever done.
So here's what i'm thinking… some stocks let's you do covered calls weekly, so i would buy the stocks, set the strike price as close to my entry as possible while being ITM.
Now let's say the next day it pumps past the strike price.. I would just buy back the shares, do the exact thing and collect what is essentially my rent from a single successful call.
If i did this a few times a month or hell, even just once a month, i'd never have to give blowies behind the dumpster ever again.
Worst case scenario, i go back to Wendys until my amazon shares bounce back.
Setting aside 10% of my networth for covered calls
byu/NecessaryLocation788 inoptions
Posted by NecessaryLocation788
2 Comments
Selling options is where it’s at – granted you need lots of $ to do it right
Yes, in a broad uptrend like we have now, covered calls are a reliable way to make small amounts.
However, “the next day it pumps past the strike price.. I would just buy back the shares” isn’t the way it works; calls bought OTM will very rarely be exercised just because the price increases to make them ITM. They’ll be exercised if they’re ITM at expiration, or if the buyer wants to “buy the dividend”, or some other scenario where the buyer sees enough value in an early exercise.