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Update README.md
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brndnmtthws authored Feb 8, 2021
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Expand Up @@ -81,6 +81,14 @@ and comparing those to SPX. I've had a lot of people complain because "that
strategy isn't better than buy and hold BRUH"–let me assure you, that is not
my goal with this.

There are conflicting opinions about whether selling options is good or bad,
more or less risky, yadda yadda, but generally the risk profile for covered
calls and naked puts is no worse than the worst case for simply holding an
ETF or stock. The main downside is that returns are capped on the upside.
Depending on your goals, this may not matter. If you're like me, then
you'd rather have consistent returns and give up a little bit of potential
upside.

Generally speaking, the point of selling options is not to exceed the returns
of the underlying, but rather to reduce risk. Reducing risk is an important
feature because it, in turn, allows one to increase risk in other ways
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