Retail investor: My shares ran up huge & honestly I think it's a bubble. So I'm selling calls against them to protect myself.


Me: If you think it's a bubble... why do you still own the shares?
Retail investor: I mean... I don't want to miss more upside if I'm wrong.
Me: So you're bearish enough to want "protection" but bullish enough to hold? Pick one.
Retail investor: The calls give me SOME cushion at least...
Me: Run the numbers. The call pays you maybe 1%. If your bubble call is right & it drops 50%... you're down 49% holding a bag with a 1% consolation prize.
Retail investor: ...that math is brutal.
Me: Don't let the tail wag the dog. If you're actually bearish, sell the dang shares. If you're actually bullish, hold them & stop capping the upside. The call does neither job.
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