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That's like saying you can rent out a burning house. It is technically true, but folks usually like to preserve their initial capital while making income. The
by jnwatson 4y ago
That's like saying you can rent out a burning house. It is technically true, but folks usually like to preserve their initial capital while making income.
There Ain't No Free Lunch in options. Covered calls give up potential upside gains for income now. You still have the same downside risk as the underlying stock.
- logicalmonster 4y ago> You still have the same downside risk as the underlying stock. Taken as a whole, it's not the same exact downside risk because the premium you collect can make up for whatever downside that exists anytime you're holding a stock. I'm not here to tell you what to do with your money, but all I'd say is that using a wheel strategy is inarguably less risky than buying stock outright.
- SilasX 4y agoThat is a good point, but is in no way evident from the initial reply[1] and its quotation of the objectionable part. [1] https://news.ycombinator.com/item?id=33548323 https://news.ycombinator.com/item?id=33548323