
Covered Calls: A Devil's Bargain
Are you looking to save time, make money, and start winning with less risk? Then head to https://www.ovtlyr.com.Covered calls are one of the most hyped strategies in the market today, often sold as a safe way to generate “income.” But the truth is, covered calls are a devil’s bargain. They cap your upside, leave your downside fully exposed, and almost always underperform in the long run. In this video we break down why covered calls are riskier than they appear, how they work mechanically, and why funds selling them as “passive income” are misleading investors.Too many traders fall for the marketing pitch that high distribution yields equal high returns. In reality, the opposite is true. The higher the yield on a covered call fund, the lower the expected return, because the premium you’re collecting is offset by the liability you’ve created. In plain English: you’re limiting your gains while keeping all the risk.Here’s what you’ll learn in this video:➡️ The truth about covered calls: Why they generate “income” at the cost of long-term growth and mean reversion.➡️ Unlimited downside, capped upside: How selling calls leaves you fully exposed to losses while cutting you out of big rallies.➡️ Cash-secured puts vs. covered calls: Why these strategies are effectively identical and both break the golden rule of leverage.➡️ Why covered call ETFs underperform: Real-world fund data showing consistent lagging behind their underlying equities.➡️ Distribution yield myths: How “income” from these funds is just your capital being eroded and repackaged.➡️ The volatility risk premium: Why backtests look good but fail in practice, especially since 2011.➡️ Better alternatives: Why holding cash or using OVTLYR filters beats chasing high yields with capped growth.➡️ Practical rules of thumb: How to structure safer covered calls if you insist on using them, like targeting 20–30 Delta strikes and only selling against stocks you plan to hold forever.We also dig into specific examples, like selling calls on AMD, to show how the math works in real trades. Sure, premiums can look attractive, but the tradeoff is always the same: you collect a little now and give up potentially huge future gains. And when markets recover—as they often do—you’re left underperforming by wider and wider margins.The reality is simple: covered calls aren’t a free lunch. They’re marketed as passive income, but in truth, they’re just a way of cashing out upside before it ever materializes. Investors chasing high yields often end up with portfolios that trail badly over time.If you’re serious about trading smarter, you need to understand why these strategies often fail and how to avoid falling for the hype. Covered calls have their place—but only for very specific situations. For most traders, they’re a trap that erodes capital instead of building wealth.Gain instant access to the AI-powered tools and behavioral insights top traders use to spot big moves before the crowd. Start trading smarter today 👉 https://ovtlyr.comSubscribe for more real talk and real signals. No fluff, no noise. Just strategies that help you save time, make money, and start winning with less risk.👉 https://www.youtube.com/@ovtlyrdotcom👉 https://www.youtube.com/@10MinuteTrading📌 Video: https://www.youtube.com/watch?v=ygVObRx9X68&list=WL&index=2#StockMarket #OptionsTrading #CoveredCalls #TradingStrategy #Investing #PassiveIncomeMyth #RiskManagement #TechnicalAnalysis #OVTLYR
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