[Calamity]

Out of curiosity, what's your total return with this approach if, at expiry, the stock price matches the strike price? In other words, how much are you making with the premiums you collect?

I guess one issue with this approach is that it somewhat assumes a period of low-inflation between now and option expiry (unless you're factoring that into the 15% expected return).

[3pt14159]

Because options are at a premium right now, for the reasons stated above, running the above strategy on Apple looks like this:

Buy at $400 (price at time of writing) sell an option at $460 for January which comes with a $42 premium[0] at time of writing, so if the stock goes up 15% over the six month period the total return is $102 per share, or about 25% return. If inflation is, say, 4% per annum due to Covid pushing it a bit higher than normal, then the total return is ~23% vs what would have been ~13% for doing the same play without selling the option, so the real return is around 75% higher than the alternative where the option was not sold.

Usually it's around 30% more, so right now is an especially good time for this play if you think that Apple will at least hold its value.

[0] https://finance.yahoo.com/quote/AAPL220121C00460000?p=AAPL22...