LogFAQs > #955174905

Imagine you have 10 stocks.

You sell calls on all 10.

In a perfect world the prices on all 10 stay exactly the same, or it goes up juuuuust a bit, but not enough to trigger the call. So now you have the premiums and you still own the stock that is worth just as much as it was a week ago.

Heck even if they all trigger you still have a profit on the sale (depending on the strike price relative to your purchase price) and the premiums and you can start over with 10 more stocks.

But even if ONE or heaven forbid TWO stocks lose value that week, you can still run NINE or EIGHT stocks the following week and still have MOST of your money working for you. Depending on how much they fell you might still be able to sell a call at or above your original purchase price, but the premium would shrink accordingly. So you can do that or you can just sit on it for a few weeks, because remember this was a stock that you (presumably) researched and deemed "safe" enough to include in your portfolio, so unless there has been earth shattering news affecting the valuation of the one or two stocks that lost value you should be just as confident in it's value as you were a week ago.

By only running two stocks you stand to tie up (or take a loss on) HALF of your money at any given time.

I just don't even know what else to say except to wish that I had your bankroll.

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~C~ FD
https://imgur.com/dGDfxaw