Pros consolidating schools
When we sell covered call options we are the state collecting money for lottery tickets.
We are the casino running the business of allowing gamblers to throw their hard-earned money into the slot machines (sorry Mom! Sure the state and casinos have to “pay up” from time to time, but that is expected and inherent in a system that generates small but consistent returns over and over again.
Furthermore, the buyer can only lose the 00 investment, whereas we, the sellers are risking ,000 (that’s where our exit strategies come into play).
We are happy with our 2-4% monthly returns, others aren’t.3-We have generated a 1-month return of 4.2% (2000/48,000) or 50 % annualized.4- If our shares are assigned (pass the strike with no exit strategy invoked) we double our profits as we garner another 00 on the sale of the stock (1000 shares going from and sold @ ). Now that’s pretty impressive but let’s examine the motivation of the option buyer (holder).So what does this scenario have to do with selling covered call options?I always allude to this strategy as a safe form of investing (although there is some risk in the stock).