4 ms·
Buy shares of stocks and use that as collateral to sell covered calls.
by henning 3y ago
Buy shares of stocks and use that as collateral to sell covered calls.
- syndicatedjelly 3y agoI tried the wheel strategy once and got burned by contango while holding USO in 2020 :/ It's a great strategy, just be careful what you buy lol
- zoklet-enjoyer 3y agoYeah I screwed myself over doing that on weed stocks a few years ago.
- maest 3y agoTerrible advice.
- pc86 3y agoIt limits your upside but of all the stock-trading advice floating around this isn't very high on the "terrible" list IMO
- maest 3y agoIt's terrible in that: 1. it is not positive expectancy (because naive strategies like this never are) 2. it involves trading in less liquid instruments, which means you lose more money to transaction fees 3. you're _selling_ options. Even if these are covered in theory, there's so much scope to screw this up implementation-wise, that it's just not worth it. I see no redeeming features for this particular "strategy".
- deleted 3y ago[deleted]