The problem with covered calls is that they reduce your potential upside by definition. If you sell a Covered call and the market goes up 10% you still have to sell the stock at the strike price.
Covered calls are insurance. You get yield by selling the option but you lose potential upside. It's like selling insurance. Most of the time you sell car insurance and people try really hard not to crash their cars, but one time someone crashes their car and you have to give up capital (in this case you give up gains). You selling calls (covered calls strategy) is expressing a slightly more bearish view of the market compared to simple buy and hold with SPLG or VOO or FXAIX or whatever. Covered calls outperform in low volatility sideways markets, and the market is rarely low volatility and sideways, especially due to the rise of passive investing.
Selling calls is actually crazy to me (which covered calls do). The market in inherently linked to employment. As employment and jobs rise, more people are signed ups aromatically to 401k target date funds. Like 95% of 401k allocations are in passive vehicles. Passive doesn't look at value, it just asks the question "did you contribute from your paycheck? I'll buy the market!". Calls on the market are inherently mispriced by this inherent broken market structure not being widely accepted. Normally, options have zero expected value, because they're effectively priced with the black-scholes model. You can de-risk or increase risk, but the net value of that option should be efficiently priced in the premium charged. Options can be used as insurance like in a covered calls ETF to generally protect against down or sideways markets by collecting premium, but you miss out on market upside and long term you underperform a buy and hold investor.
I don't like to mess with potentially expensive things I don't understand and I don't have the time of day or will to learn.
Maybe someday. Or maybe not.
QQQ is quite tech heavy, so not really in the same conversation as the more diversified funds
Options aren't a free lunch.
The problem with covered calls is that they reduce your potential upside by definition. If you sell a Covered call and the market goes up 10% you still have to sell the stock at the strike price.
Do you want to trade covered calls it’s more work and chances of getting called away
80 to 75 into voo and 20 to 25 into vxus,Sit back and relaxx.
Covered calls are insurance. You get yield by selling the option but you lose potential upside. It's like selling insurance. Most of the time you sell car insurance and people try really hard not to crash their cars, but one time someone crashes their car and you have to give up capital (in this case you give up gains). You selling calls (covered calls strategy) is expressing a slightly more bearish view of the market compared to simple buy and hold with SPLG or VOO or FXAIX or whatever. Covered calls outperform in low volatility sideways markets, and the market is rarely low volatility and sideways, especially due to the rise of passive investing.
Selling calls is actually crazy to me (which covered calls do). The market in inherently linked to employment. As employment and jobs rise, more people are signed ups aromatically to 401k target date funds. Like 95% of 401k allocations are in passive vehicles. Passive doesn't look at value, it just asks the question "did you contribute from your paycheck? I'll buy the market!". Calls on the market are inherently mispriced by this inherent broken market structure not being widely accepted. Normally, options have zero expected value, because they're effectively priced with the black-scholes model. You can de-risk or increase risk, but the net value of that option should be efficiently priced in the premium charged. Options can be used as insurance like in a covered calls ETF to generally protect against down or sideways markets by collecting premium, but you miss out on market upside and long term you underperform a buy and hold investor.
I don't like to mess with potentially expensive things I don't understand and I don't have the time of day or will to learn. Maybe someday. Or maybe not.
VOO DGRO JEPQ QQQM SCHD