Retail investor: Covered calls are great. Free income every month on stocks I already own.


Me: What happens when one of those stocks takes off?
Retail investor: I mean... it gets called away at my strike. But I keep the premium.
Me: So the company you love finally rips 40% & you got a few bucks of premium while your shares walk out the door at the bottom of the move?
Retail investor: ...I literally lost a huge winner like that last month.
Me: That's the trap. You capped the exact upside you bought the company FOR. On your best winner. For pennies.
Retail investor: So the premium isn't worth giving up the upside?
Me: Never on companies you're bullish on. I sell portfolio secured puts instead. Income AND I keep every bit of the upside.
Don't cap your best winners for a few bucks of premium...
Covered calls hand away the steak & keep the napkin.
Sell portfolio secured puts. Income without giving up the upside.
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