To The Moon

$PLTR COVERED 251212 CALL 182.5$ 

Why Covered Calls Work Better Than "Taking Profit"

Many investors feel good when they sell a stock high and buy it back lower. It feels smart, like free money. But in reality, this breaks compounding and increases the chance of missing real long term gains. Even if you trust your timing skills, no one can predict the market with today’s volatility.

A much simpler and more effective approach is to keep your core holdings and sell covered calls to collect income. This method allows your portfolio to keep compounding while still giving you a clean way to take profit. Options sound scary at first, but the concepts below are very beginner friendly.

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1. Compounding Works Only If You Stay Invested

Stocks grow over time because of compounding. When you sell, even partly, you interrupt this process. You also risk missing the next rally. Missing even a few strong days can cut long term returns sharply.

Staying invested protects you from timing errors.

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2. Selling Calls Is A Low Risk Way To Take Profit

A covered call is simple. You own the shares. You sell a call option. You receive a premium upfront. This premium is your “profit taking” without liquidating any shares or raising your average cost. For example, if you bought PLTR at 20, selling covered calls lets you monetise the position without buying more at 180 and diluting your entry.

If the stock stays below your strike, you keep both the shares and the premium. That is all beginners need to understand for now.

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3. You Earn In All Market Conditions

Sideways market: You keep collecting premiums.

Slow uptrend: You get the rise plus the premium.

Downtrend: The premium helps reduce your effective cost.

I have examples on my profile where I still made money during steep bear markets. This is why long term investors love covered calls for reliable income. Multi-directional profit hits different.

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4. You Do Not Miss The Upside

The usual fear is “what if the stock moons” which causes FOMO. You can control this by choosing a far OTM strike. A helpful metric is the Greek Delta, which gives you a sense of probability.

This lets you collect premiums while staying positioned for upside. You keep compounding and still earn monthly income.

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5. Anyone Can Start

You only need 100 shares, and you can do this with almost any liquid stock or ETF. Beginners can choose wide, safe strikes. Professionals use this to generate consistent cash flow.

If you cannot afford 100 shares yet, try the PMCC strategy. It usually costs only 5K to 9K to control 100 shares through LEAPS. It is one of my favourite beginner strategies and I have posted proof of profits on my profile.

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Summary

Selling shares to take profit interrupts compounding and increases the risk of missing big moves. Selling covered calls allows you to take profit through premium while keeping your long term holdings untouched. It is practical, low risk, and friendly for both beginners and experienced traders.

I hope this sparks your interest and helps remove the fear around options. They have been a game changer for me.

Happy trading everyone, and wishing you a strong finish to Q4 2025.$PLTR COVERED 251212 CALL 182.5$