Questions Regarding "Making $1,000 a Month" · Invest & Retire Community

Questions Regarding "Making $1,000 a Month"

If I buy 100 shares of MSFT at the current price of $400 and sell a call option with a strike price of $405, and at expiration the current price is $395, I understand that I received the premium and still hold the shares with an unrealized loss of $5 per share.

In the videos, it is mentioned that we can repeat this process each month. However, what if the price continues to decline and I repeat the same operation?

For instance, if the current price drops to $385 the following month, and I sell a call option with a strike price of $390, and at expiration the current price is $392, I might end up with a realized loss of $8 per share. While this might not be catastrophic as the premium could potentially cover the difference, what if we enter a moderate correction ranging from 5% to 10% from recent highs? Would this strategy still be feasible, and how should we address such a scenario?

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