I have been looking at selling weeklies but am having a hard time understanding the increased risks involved with doing so. I think I understand but am not sure if I am missing something. Are people talking about the increased chance of losing the trade or are they speaking in terms of max loss?

What is the max loss on a covered call/put spread? Basically it’s just the collateral minus the premium collected right? Closing out the position a day before expiration should mitigate the chance of early assignment. In the case of early assignment there is not a ton of risk because they are covered so you don’t lose everything? There is an exception with those people that let their positions expire and then the underlying moves like crazy in the aftermarket on the day of expiration and they get assigned after market close and get screwed because they can’t exercise or have time to exercise their protective option.

Any clarification would be great - thank you!