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Update README.md.
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brndnmtthws committed Feb 8, 2021
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Expand Up @@ -84,10 +84,12 @@ 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.
ETF or stock. In fact, I'd argue that selling a naked put is better than
buying SPY with a limit order, because at least if SPY goes to zero you keep
the premium from selling the option. 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
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