Retail investor: I’m holding my $INTC & selling covered calls. At least it pads my downside

Me: Where’d you buy it?
Retail investor: around $130
Me: & where is it now?
Retail investor: ...$66
Me: That’s a $64 drop. How much have the covered calls paid you?
Retail investor: like a few bucks a month
Me: So they padded maybe 5% of a 50% loss
Retail investor: well I’ll sell calls to get rid of the shares
Me: For that to work, the stock has to finish ABOVE your strike at expiration. If it keeps falling, the shares never leave. You just keep holding the bag
Retail investor: but if I sell I pay taxes
Me: You’re down 50%. There are no taxes. That’s the problem
Me: If the thesis is broken, you sell. Covered calls don’t fix a bad position
Covered calls don’t protect you from a stock that was a bubble.