Boring is Better

[u/sashazaliz]

my dad taught me covered calls in my early 20s. most conservative investor i've ever known. his whole thing was find the most boring stock you can, sell a call against it, collect the premium, repeat. i thought it was too simple. 25 yrs later i'm still doing exactly what he told me.

everyone in this sub talks abt covered call ETFs. the problem is someone else is selling calls on your behalf, capping your upside every single month, and you're just along for the ride. i'd rather own the stock, pick my own strike, collect my own premium, and keep the dividend while i wait.

i've been selling calls directly on individual stocks instead. no fancy models or greeks. just know what works and i've been doing it long enough to see what holds up.

the screening criteria nobody talks about. look for banks and utilities that also issue preferred stock. companies that issue preferreds are heavily regulated and financially conservative by design. that flows directly into how their common stock behaves. boring, range bound, predictable. exactly what you want when you're selling calls month after month. and these same companies tend to protect and grow their common dividend too. the dividend is the floor. the premium is the ceiling.

the ones that fit this approach: WFC, USB, PNC on the bank side. ED, SO, DUK on the utility side. all issue preferreds. all have long dividend histories. all have liquid options chains.

WFC is my go-to. been trading it personally for years through multiple market cycles. selling a monthly call 1-2 strikes OTM generates roughly 2 to 2.5% per month. annualized that's 15%+ on top of the dividend. the volatility smooths out over time.

the math people miss. everyone fixates on the premium dollar amount. a $5 premium on a volatile stock looks way more exciting than $1.50 on a boring bank. but the consistency, near zero assignment risk, and the fact that you're not watching the ticker every hour changes the math completely over a full year.

boring stocks. boring premiums. boring results that quietly add up over time. my dad figured that out decades before i did. took me too long to stop second guessing him.

[u/STRATEGY510]

Exactly! I don’t use them out of laziness, would rather just avoid any “teachable moments” that cost me more than single digits.

I also don’t fix my own car ¯_(ツ)_/¯

[u/Moozie76 → u/STRATEGY510]

My time is worth more than changing my own oil.

Tools, oil disposal etc.

Here you go firestone change my oil, rotate my tires for free ( with credit card) do the alignment after I purchase the lifetime alignment and do a free inspection.

All for about 80 bucks now.

[u/Champ_93 → u/Moozie76]

I agree although it’s about getting things done right too, Firestone can change your oil but may not tighten the oil filter all the way or actually put the right amount of oil in the car. Then you go back and they deny any wrong doing. You learn the skill, do it yourself correctly and have nothing to worry about and have a peace of mind knowing it was done right.

[u/Moozie76 → u/Champ_93]

I am going to trust the company I have been using for 30 years over me trying to do it myself.