3 ms·
Anyone trading covered calls on MM in assets already understands this. Interest is a simpler concept which leads people to more advanced yield enhancement stra
by 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 agoNowadays, 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