r/thetagang
After 20 Years in the Market, Covered Calls Finally Taught Me Patience
A veteran investor shares how selling covered calls shifted his focus from chasing growth to consistent income and patience.
- Covered calls provide consistent income and help maintain patience during market downturns.
- Selling calls at genuinely acceptable strike prices prevents regret when shares are called away.
I'm 48 years old and live in Edmonton, Canada. I've been investing for almost 20 years and have lived through the 2008 financial crisis, the COVID crash, and every kind of market environment in between. I've made plenty of mistakes, had some great wins, and today my portfolio is a little over $1 million.
For most of my investing life, I was obsessed with finding the next big winner. I spent years chasing growth stocks, trying to double my money as quickly as possible. Sometimes it worked. More often, I would buy too late, hold too long, or sell too early. Looking back, I probably spent more time searching for the next opportunity than managing the positions I already owned.
A few years ago I started focusing more on generating income from stocks I planned to hold long term. That's when I got serious about covered calls. At first, I honestly thought the strategy was boring. The premiums didn't seem exciting compared to what I thought I could make from trading. But month after month, I kept collecting income while holding companies I already liked.
One trade changed my perspective completely. I owned a large tech stock that had already given me a strong gain. I sold covered calls at a strike price that I thought was safely out of reach. Then earnings came out and the stock jumped far more than I expected. My shares were called away. I still made a profit on the stock and collected premium, but I couldn't stop thinking about all the upside I missed. For a few days I was annoyed.
Then I realized something important. I had followed my plan perfectly. The only reason I was unhappy was because I was comparing my actual profit to an imaginary profit. That lesson helped me more than any options book ever did. Since then, I've only sold covered calls at prices where I'm genuinely willing to let the shares go.
Today I don't try to maximize premium. I focus on consistency. The extra cash flow isn't life-changing, but it adds up over time and helps me stay patient during slow markets. Ironically, once I stopped trying to hit home runs every month, my portfolio started growing faster and my stress level dropped dramatically.
For those of you who regularly sell covered calls, what's your main objective? Maximum premium, avoiding assignment, or generating steady income from long-term holdings?
Hello fellow edmontonian 🤘🏻
Another thing people doing often consider is the fact that you don't need to sell calls against your entire position. Yes, this will reduce your income over time but it keeps you open to a little bit of explosive upside.
This is such an underrated comment! I do this and it’s working out pretty good
Well I can say this much, doing it with the cues is kind of the opposite of what I'm getting at.
RSP seems like a pillar of stability at this phone since it's equal weighted. QQQ would be quite the opposite since it's heavily weighed by the volatile techs, especially now that SPCX is coming into it in 2 weeks.
But hey if you want to try paper trading, I say try both and see what outcome materializes. I'm of the opinion that AI bubble blow off could be any day now, especially with a new fed chairman and the carry trade concerns from the Bank Of Japan, the maxing out of leverage in the markets etc.
I'd be selling covered calls while at West ed mall !
TLDR. Go Flames Go ;)
Have you heard of GOOW AMDW ARMW? These so called ETFs do covered calls on the same stock and pay dividents weekly. The divident varies every week but I like them so far and plus their value per share has gone up also. I do covered calls on other stock and I do weeklies mostly. My advice keep an eye on the Delta. Good luck
With the brokers where I have most of my portfolio, the catch is the contract fees. They're stupid high for options.
Most people dont know anything about stocks. Yhey are just happy their 401k is growing and how much their employer is contributing and they are content.
I use all premium to add to ETFs and GOOG positions
E-town. I’ll read this later. But shout out brother
Shoot me an invite link
"I made a fortune getting out too soon" - J. P. Morgan
if i could go back in time i would open a Roth Ira and regular brokerage and own nothing but SP500 and NAQ100 in the cheapest ETF or Mutual form possible
never sell.....
Tax drag.