Steve 667: I'm of same opinion.
I just don't see any way around it.
Particularly with volatile stocks.
I'm in situation that perhaps is stupid. Which would be my own 'doing.'
My largest positions are in stocks I do NOT want to get called out of. Why? Because of my low cost basis.
Because I've bought and held for 2,3, or 4 years.
I looked at my largest position's option chain this morning: SUNW.
Stock closed @ roughly 123. All-time high. Friday.
The September 135s calls are @ $2 bucks.
So, I ask myself, "Do I want to pick up pocket change in front of a bulldozer selling calls WITH THE RISK of losing this stock?" (That analogy was first told to me by one of my full-service brokers two years ago <g> ... I like it but it's not original from me ... just want to say that. I think it characterizes RISK/REWARD very well about entire investing experience ... not just the writing CC thing).
To me, the risk of being called out with a cost basis of $20 bucks on an $122 stock are ridiculous. Rather hold the stock. And/or buy puts on it for a "hedge."
OR, sell some or all of the stock outright to nail profits.
Now. Not hold it it 'waiting' for the 'inevitable crash,' which really is not inevitable at ALL. The sucker can go to $150, despite 'everyone's' predictions.
My basic premise, however, is that I'm growing principal. Am not at ALL comfortable with 'retiring' on less than a million, fer sure, at age 47.
Perhaps a point I'm not sure anyone else 'worries about' is one I do, and it's this:
"Bonnuss," I ask myself. "What's the point of 'retiring' if you are going to be umbilically-corded to watching the stock market?"
On a daily, weekly AND monthly basis. I see no way around the need to watch the underlying equity in this scheme of writing calls for income on volatile, momentum stocks...constantly.
Again, though, I'm so diversified with this strong 'bent' towards 'time = profits' I just can't 'let loose' of that BIAS. Which is "Grow the effing principal" to the point where financial SECURITY is achieved.
I know I'm not contributing to those who wish to try out the 'selling CCs for income' method and I apologize for what likely looks like 'critisism' or 'skepticism.'
Just don't want to 'gamble away' my life savings.
I'm operating, obviously, from a foundational FEAR basis, vs. GREED.
Just fear. Period.
'b-i-a'
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