Please note that the Monday Morning Millionaire Program contains opinions only. It does not provide any investment advice or endorsements.
Concerning derivatives trading, (derivatives are puts and calls) the Monday Morning Millionaire Program (15.5% annual return since 2012) recommends that members just sell and never buy derivatives. Moreover, the program recommends that members sell derivatives in their fun portfolio only.
Investors always make and never lose money writing (selling) puts and calls. However, when writing calls, they give up the opportunity of making even more money if the underlying security rises above the selected strike price.
Overall, investors can lose money if the underlying security drops to a greater extent than the premium received. Been there, done that with AbbVie (symbol ABBV) in my “fun” portfolio. Wasn’t fun.
So again, the Monday Morning Program recommends that members sell derivatives in their fun portfolio only.
But not always!!