3 ms·

How exactly are you earning 10% interest?

• marvin 5y ago
  No one does that reliably. It's 5-7% after inflation on average, where a five-year average is expected to get you within 2 percentage units or so of that number. Commonly large deviations over shorter timeframes and rare deviations over longer timeframes. The last 15 years have been one such deviation, maybe GP figures that's the normal now.
• optimiz3 5y ago
  You can do it fairly reliably selling calls against large equity holdings. Doesn't have to be 10% if capital base is higher.
  • totalZero 5y ago
    That's not interest, it's yield enhancement. You're giving away upside potential in exchange for premium collected, and you still have downside exposure.
    • optimiz3 5y ago
      Anyone trading covered calls on MM in assets already understands this. Interest is a simpler concept which leads people to more advanced yield enhancement strategies. Giving away long tail upside in exchange for guaranteed yield is a perfectly fine method of salary replacement.
      • totalZero 5y ago
        Nowadays, not everyone who trades options in a personal account understands the risks. It's not interest and it's not guaranteed yield. It's yield enhancement. You are exchanging one reward for another, without totally attenuating the risk. You can lose money if the stock falls below your purchase price minus the premium collected. Collecting interest can be risky too, but it's a question of default rather than price action. Signed, Your Friendly Neighborhood Skewness-Man