I do not sell covered calls on my base portfolio.


Here is exactly why.
My base portfolio is the foundation.
VOO. Q. The compounders.
Stuff I want to hold for decades.
If I sell a covered call.
The stock rips.
Now I have two choices.
Roll up and out and pay for the privilege.
Or get assigned and realize a massive capital gain.
The capital gain hits my taxes.
I now need the stock to fall a meaningful amount to re-enter and break even on the trade.
That is not a strategy. That is a tax trap.
If I want to trim. I just trim.
If I want to hold. I just hold.
Covered calls turn winning positions into headaches.
No thanks.
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