LogFAQs > #951891586

I stand by that it is basically free money for him and that it introduces no particular extra risk for his style of investing. Your argument against it that there are certain edge cases where you make less money than you would normally could be used to argue that investing in SPY could have some element of risk. Like yes you can lose money investing in SPY but it's very difficult to do so. For Moonroof it would be similar if he follows the guidelines.

Like pretty much the only way he is unable to stop loss quickly that matters for CCs is if there is a massive AH gap down that he would have caught with a stop loss (which would only happen if he had an order in place beforehand). But I mean the funny thing is if you sell at the money CCs right when you buy it you actually get much higher premiums than you would when playing from behind too. He basically would get a free drop just by being aggressive with selling a CC. Like I'm looking at PTON right now and if he say, bought 900 shares NOW and immediately sold a block of 9 $109 CCs for next week he'd immediately receive $360x9 or about 3% of his initial investment back, which is as it turns out close to the loss he tends to incur before he gets out. It's really hard to imagine that he on average would lose money from moves like that if he just lets the contracts ride out and doesn't sell contracts for a price less than he's willing to sell out of the stock on.

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No problem!
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