diff --git a/README.md b/README.md index d039e2479..6c4583023 100644 --- a/README.md +++ b/README.md @@ -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