Is selling covered calls considered a high risk strategy to generate retirement income?

I am looking to increase my overall retirement savings. I have a company 401(k), but also own a Roth IRA that I would like to invest more aggressively. Would you consider selling covered calls too risky because it could jeopardize my funds?

Retirement Savings, Investing, IRAs
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March 2017
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Done properly, a disciplined covered call strategy can make a lot of sense in a tax qualified account like an IRA or ROTH. If you buy stocks that you don't mind holding for the long run, let them appreciate and then sell out-of-the-money calls against them, you will create income from the sale of the call premium and, because you've sold an option at a strike price above both the current price and above the price you paid, if the stock is called, you'll sell it at a profit. If the price of the stock declines after you sell the call and remains below the strike price until expiration, you keep the stock, keep the premium, and you can repeat the process. While this strategy is considered risky because it requires the purchase of individual stocks and involves relatively active trading, the potential to lose money (which is what most investors are worried about when they consider risk) is no higher than an individual equity buy and hold strategy.

March 2017
March 2017
March 2017
3 weeks ago