In a bull market when everything goes up this is a good analogy, but the markets don’t always go up. Covered calls can help you get out of a position at your desired price and get some premium along the way. They also cushion the blow during a bear market or if the stock/ETF stays flat for the week.

Relatively speaking it is like picking up nickels. It’s reasonable to get a 1–2% increase in your portfolio’s worth each month using covered calls and cash secured puts. It doesn’t look like much, but it’s enough to beat average market returns in addition to appreciation (although appreciation gets a little more complicated based on what your strike price is and what the stock price becomes).

Some people get 1–2% increases to their portfolio each week with this strategy, but they choose strike prices that are right in line with the stock price and sacrifice any potential stock price appreciation. I prefer the safer 1–2% monthly growth for my portfolio.

If you want to passively invest in an index fund you’ll get the market average return. This strategy is for people who look at their portfolios daily and want to get a slightly higher market return and income at the same time.

I already got into the habit of looking at my portfolio each day so it didn’t take much additional time to incorporate this strategy. I also love to track my results on a spreadsheet and document my progress.