[durkie]

it sounds like you're basically advocating something like an s&p 500 buy-write index investment instead of just an s&p index investment, right? basically selling covered calls on your index investment.

I agree with your premise, and make a pleasant bit of side-income selling covered calls on individual stocks that I own, but it seems like the buy-write indices don't actually fare well, or at least $BXM doesn't. Way worse than I would have expected actually...any idea why?

[todd8]

If the strategy worked, that would mean that calls were overpriced. Why would that be? Why wouldn't their price reflect their value?

Since indexes by themselves have such low overhead costs, more complex strategies have difficulty generating superior returns.

[durkie]

that's a good point -- i suspect the s&p 500 receives so much attention in comparison to any particular individual stock that there is very probably little change to fish out of its couch cushions