Can Someone Find a Flaw in My Trading Strategy That 60% Annually?

[Anonymous No.23932640]

>Buy stocks for $10 per share
>Sell 10 day covered calls on all my shares for SLIGHTLY more than i paid for them

IF OPTIONS EXPIRE WORTHLESS
>Repeat strategy and continually collect premiums

IF OPTIONS GET EXERCISED
>Use slight capital gains, my principal stock, plus my options premium cash to repurchase the stock and do the exact same thing.

The options premiums on this strategy, when compounded every 10 days, is 60% annually of the value of the stock base. 60% returns just from options trading.

[Anonymous No.23932649]

>>23932640
shut

[Anonymous No.23932684]

>>23932640
This strategy is called the wheel and Reddit has been doing it for at least two years now. Only downside is when stock prices go down but if you’re happy to end up holding for a long time it’s a win-win

[Anonymous No.23932738]

>>23932640
Also your 60% won’t be sustainable the second the stocks drop. E.g:
Buy AAPL at 100 dollar
Write covered calls at $105
AAPL goes down to $80
The calls expire worthless BUT now the premiums for 105 dollar calls will be practically zero and if you write 85 dollar calls you’ll be out of a loss.
This trading strategy is optimal when your DCA avging for a long term hold. That way even if your AAPL stocks dropped to 80 dollars you can buy MORE AAPL stock then write calls for 85 dollars and profit off the newly bought shares. So to optimise this strategy you need like 3-5 stocks you’re willing to hold literally for years and then a constant flow of income. In which case it’s the single best way to generate a retirement portfolio.

[Anonymous No.23932868]

>>23932684
The risk of the stock price going down is inherent anyway, at least this system mitigates the loss by compensating you with the premium

>>23932738
I'm aware that stocks could go down, but under the assumption that they remain stagnate or go up, this works.

[Anonymous No.23933026]

it's retarded because if

>market goes down
your are bagholding a stock you dont want

>market goes up
your shares are called away and you miss out on gains

would have been a good strategy 30 years ago but not with current volatility.

[Anonymous No.23933117]

>>23933026
>your are bagholding a stock you dont want

You can always repurchase the options for cheaper than the premium you recieved and then sell the stock.

>your shares are called away and you miss out on gains

The gains on the option premiums outpace capital gains by a very large margin.