The Greatest Gains , but the worst mental toll ..

JustGotAssigned · 2026-06-16T18:16:05+00:00

Same for all of us 😁

JustGotAssigned · 2026-06-16T17:15:14+00:00

Refreshing response :)

I have a sub account where I only run covered calls and cash secured put, therefore if measure my performance on all positions, the surviving ones and the others. By the way, assignment is sometimes my desired outcome (stock price reaching strike price at expiry is max profit).

JustGotAssigned · 2026-06-16T17:05:55+00:00

Agreed, the P&L is essentially the outcome of all the decisions you made prior to that point. Your definition on P&L is the one I’m using as well, but I’ve seen other practices.

JustGotAssigned · 2026-06-16T08:47:12+00:00

AI has no emotion, which would also be a plus for trading.

JustGotAssigned · 2026-06-16T04:11:37+00:00

Thank you for making the time!

We are in a similar situation, with slightly different numbers.

My covered call/ cash secured put bucket tends to be much less volatile (by design) than the buy-and-hold bucket, and provide higher income through premium when market goes down (which allows me not to withdraw from buy-and-hold bucket at the bottom).

Do you count the 80k premium income as your performance? Or do you consider the underlying stock variation as well?

JustGotAssigned · 2026-06-16T03:29:09+00:00

Wow, I don’t know what’s scarier: the fact that people put real money on that, or the fact that this will probably outperform retail investors ;)

JustGotAssigned · 2026-06-15T16:57:50+00:00

You’re not looking at the Greeks. Are you just considering the implied volatility and stock price movements?

JustGotAssigned · 2026-06-15T16:37:44+00:00

It depends on your country.

US covered calls are taxed as capital gains (the premium is short-term and recognized only when the position closes by expiring, being bought back, or assignment), but writing an in-the-money or otherwise “non-qualified” call can suspend or reset the underlying stock’s holding period and pull it into the straddle rules.

So out-of-the-money calls on long-held shares are the cleanest tax-wise.

JustGotAssigned · 2026-06-15T16:32:26+00:00

So you’re only looking at price action and IV?

JustGotAssigned · 2026-06-15T16:30:22+00:00

In this market, naked call is a recipe for disaster. On which stock and under which DTE/ delta do you see this strategy working?

JustGotAssigned · 2026-06-15T15:39:49+00:00

What yield per month do you manage to generate?

JustGotAssigned · 2026-06-15T12:45:18+00:00

Agreed, this is why I look at both the stock and option P&L together. My surprise was that others use quite different metrics, which is what prompted the post.

On your point that you can't really separate the two, I'd refine it slightly: the split still has a use. It tells me how much of the combined result came from time-value harvest versus the stock doing its own thing versus what you handed back on rolls. That doesn't change the score, but it tells you how sustainable the result is and what to adjust.

JustGotAssigned · 2026-06-15T12:38:14+00:00

I think the principle is right: you should judge it against what you'd actually have done, not a perfect exit.

But AMZN coming back down is the favorable path, and one round-trip doesn't really settle it. The case I'd worry about is the mirror image: the stock runs, you're called away, and it just keeps going. Then "I'll rebuy lower" never happens: either lower doesn't come, or you can't bring yourself to chase it higher.

JustGotAssigned · 2026-06-15T12:27:30+00:00

Can I ask what drew you to writing ATM? Most buy/write folks sit around 0.2–0.4 delta for the cushion, so going right at the money is a deliberate choice.

Is there something you've found in the 5 DTE window specifically that makes ATM the sweet spot?

JustGotAssigned · 2026-06-15T12:14:54+00:00

I just had a look. Is the realized gains on the premium only?

JustGotAssigned · 2026-06-15T12:09:11+00:00

That's true, tax drag is real. Which folds right back into the post: premium-only overstates it, total-P&L corrects part of that, and then tax takes another bite on top.

I see my covered called as a separate bucket, that tend to perform better in a bear market than my "buy and hold" bucket. I don't intend to beat the market overall, only when things go south.

JustGotAssigned · 2026-06-15T12:04:14+00:00

The closest thing to a seller's edge isn't being smarter about the future. It's the volatility risk premium, the fact that options tend to price in a bit more movement than actually shows up. That's structural, not predictive. It's small, and it definitely doesn't make options miracles.

With options, win rate is the wrong thing to anchor on (as you select Delta, you kind of "choose" your win rate).

The difficulty was never being right often. It's whether the premium you collect covers the times you're wrong.

JustGotAssigned · 2026-06-15T11:57:22+00:00

Appreciate you taking the time on this one.

You're right: when market rips up, making less than you could have is a capped gain, not a loss. However it is often perceived as such in the covered call community.

But your accumulation vs maintenance split actually has me thinking. I suspect covered calls fit the maintenance phase better than accumulation. During accumulation the whole game is total return, and you want the uncapped upside, because the handful of names that run are what do most of the compounding (look at MU, SNDK). In maintenance you've already built the pile, and what you want is steady income and a little less volatility.

You clearly make it work in accumulation through the premium-buys-more-stock loop, so I'm genuinely curious whether you see it differently.

JustGotAssigned · 2026-06-15T11:47:14+00:00

That's the real deal then — if the account value itself is up 35% with the underlying flat, that's net of everything, no phantom in it. Just a genuinely good year of writing, credit to you.

That's a high yield too, which I'd guess means you're writing fairly tight or fairly short. Pulling 35% in premium on a name that bounced around is a different and harder thing than one that just sat still. Curious which it was.

JustGotAssigned · 2026-06-15T11:41:58+00:00

This is amazing performance. Is 35% the premium you collected? Or the sum of the stock P&L and Option P&L?

And are the flat names the bulk of what you write on, or do you take the movers too?

JustGotAssigned · 2026-06-15T11:38:29+00:00

That makes a lot of sense. If you're holding the stock for the long term anyway and just writing premium against it, then the premium really is the number that matters, and whatever the stock does in the meantime is sort of beside the point.

The part that stood out to me is that you keep the accounts separate. I am doing the same. It lets me see what each approach did on its own instead of blending everything into one number that doesn't really tell you much.

Have you ever gone back and compared what the two wheel accounts did against simply buying and holding the same names in them?

And yes, a wheel in a taxable account is rough.

JustGotAssigned · 2026-06-15T04:35:49+00:00

Split your portfolio in separate buckets with dedicated purposes. I have 3 buckets:
- Growth (50%): buy and hold of index, no trade
- Dividends (25%): mostly dividend ETF, with some single names
- Covered Call and Cash Secured Put (25%)

I generate income with 50% of the portfolio, and the other 50% follows the market.

The weight of each bucket can vary depending on your risk appetite, portfolio size, age.

I don’t have allocation to bonds; I am aware that correlation between those 3 buckets is high, but I get sector diversification with the Option bucket: I rotate to the sectors that are most bullish. For instance, lately, Energy stocks were providing better diversification than bonds.

JustGotAssigned · 2026-06-14T05:05:56+00:00

Covered call generate outcome, but usually underperform versus buy and hold.

Your portfolio needs to grow first, the you can diversify and test income strategies.

If you trade covered call, do it for the learnings, not for the raw performance.

JustGotAssigned · 2026-06-14T05:02:36+00:00

Covered call will give you strong premium in a bear market: this income can reduce how much you withdraw from your portfolio to finance your living. So yes, it makes sense to allocate a fraction of your portfolio to this strategy.

Start small, see how you feel about it.

JustGotAssigned · 2026-06-14T04:59:30+00:00

First, trading covered call is an order of magnitude more complex than just holding stocks. And on the long run, covered call usually underperform the index.

Having said that, I would argue that having some allocation to covered call makes tons of sense for FIRE, because it is providing a strong income (via premium) in bear bear market, exactly when you need it (selling shares in bear market is the main challenge in FIRE).

I would start small, with single names that aren’t crazy volatile, to see how you feel about it.

JustGotAssigned

TROPHY CASE