First Experience writing covered calls
Writing covered calls on optionable ETFs is fairly low risk. You buy, or already hold, an optional ETF such as IWN. Then you write a covered call at a strike price equal or greater than your purchase price. The risk is that your ETF will rise above the strike price and the option will be executed, leaving you with a profit less than the potential profit. Thats not risky at all.
But there is another side. A side that I thought I would start with, and one you face with all stock purchases. As I am not a full time stock trader so I place limit orders the night before, then check on them after work. I am making long term choices, I don’t really care about what the market or my portfolio does from day to day. But for my first covered call, I cared. I placed an limit order for IWN, a Russell 2000 Value ETF, and since I didn’t own the stock yet, I had to wait until the next night to place the covered call order. My limit order is filled early because IWN dropped. That night I place my cover call sale, and the next day it never sells because IWN drops again.
IWN has a place in my portfolio, I just wished I had a one day delay in purchasing it. My option hasn’t sold, and I am not sure that it will sell give the current strike price and option date.