QUOTE(Hansel @ Jul 14 2021, 03:33 PM)
Apologies for late reply,... was busy,...
You put it so easily in the above,... Upon seeing your reply now, I'll just say this very simple thing : What if you bought Lemonade and AMD and the price dived deep down and put you in the red, you'd be having unrealised capital loss. You can't sell because you'd be experiencing real loss then, and you'd continue holding,... causing you opportunity loss in other counters.
One of these days, there could come a time when there is no options offered on Lemonade and AMD,... causing you not being able to earn anymore premiums.
Conceptually,... the above line is something like the DLC game,... for many ctrs, though you are very good in the movement of such ctrs, you can't earn from DLCs because there are just no DLCs offered for such ctrs. Yeah,... we can say,... such ctrs have no liqiduidity, etc,... but the fact remains that nobody offers DLCs for such ctrs, so we can't play and profit from these ctrs.
I don't normally agree with him but correct me if I am wrong because I think covered call is pretty safe in the sense that your maximum loss is actually capped.
To calculate the maximum loss, you just have to get the Stock Entry Price - Option Premium Received.
Supposed if the stock price goes to zero, he only loses his capital for the said stock (minus all the premiums that he has received).
This is not naked call that carries unlimited risk. If he is comfortable selling his stock price at strike price, why not? Still, I wouldn't call it "dividend".
QUOTE(TOS @ Jul 14 2021, 04:43 PM)
I have long warned him options are not "dividends" per se. That extra premium comes with the risk one has to bear.

Everyone has different risk appetite. His is somewhat mouthful haha
QUOTE(Hansel @ Jul 14 2021, 05:52 PM)
Actually,.. it's very dangerous for investors and new investors to read such postings,.. equating option premiums with dividends received. Must not follow blindly,...

Having said the above, I do agree that option premiums should not be equated as "dividends" per see. Plus, option trading is definitely a no-no for new investors.
Someone should open a thread on this and discuss/debate further
This post has been edited by solstice818: Jul 14 2021, 06:52 PM