[cashewchoo]

Ah I missed that he was selling calls for stocks he owns. That makes it even less interesting IMO? The premiums on these options are small enough and now you're also capping upside on stocks you already own. And remember that black swan events happen once a month in finance, so I think people would be surprised how far OTM they need to go to actually get to a "minimal" risk of them being ITM.

[stocknoob]

Normally you'd wait until the volatility is a bit higher, sell a few covered calls against 5-10% of your shares. If the market jumps up, roll the calls out and sell more.

If you get assigned, that's great, immediately sell a put. I've been able to do this against SPY/QQQ, rolling and never getting assigned. So it's all gravy on top of the existing market returns.

You can eke out a few pct a year this way, but from a SWR perspective it's like doubling your hoard.

[dbancajas]

> remember that black swan events happen once a month in finance, so I think people would be surprised how far OTM they need to go to actually get to a "minimal" risk of them being ITM.

I think you're talking about the wheel strategy. Keep reading this at r/thetagang but I believe the premiums lately have been higher than normal so that's why lots of people suggest this. HN was one of the last places I would see this suggested.

[stocknoob]

Yep, I basically do the wheel but I try to avoid taking assignment. I just roll out calls if the stock start creeping up. I initially only sell against a portion of my shares so I have the ability to sell more options, at higher strikes, and not take a loss.

If I'm underleveraged, on a weekly expiration date (MWF) I'll sell a bunch of options a few strikes out a few hours before expiration, with stops. Usually they decay down and you get a lot of premium in an hour.

[xwdv]

There’s no need to wheel. Do you own stocks? Yes? Do you own them in blocks of 100 shares? Yea!? Then you could be making extra income just buy selling covered calls on them while you hold them long term.