Retail investor: I sell covered calls on my stocks for a little extra income.


Me: What happens when one of them rips?
Retail investor: Well… it gets called away at my strike. But hey, I keep the premium.
Me: So the company you love finally doubles, and you got a few bucks of premium and your shares yanked at the bottom of the move?
Retail investor: When you say it like that it sounds bad.
Me: It is bad. You capped your best winner for peanuts. I sell portfolio secured puts instead. Stay bullish, never give away the upside.
Retail investor: So you get the income without capping your gains?
Me: Now you're getting it.
Please don't be like most retail investors...
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