Hello everyone,
I would like to hear some honest, no-holds-barred feedback from experienced and established traders.
My question is this: Over the course of 10+ years, do basic options strategies – specifically selling covered calls, cash-secured puts, or a wheel strategy – actually outperform growth-centric ETFs (i.e., QQQ)?
Everything I find online (especially on YouTube) seems to be very pro-options trading, but many of them that market themselves as coaches, typically are trying to sell you a course. On the other hand, there are guys like Ben Felix (who is a respectable financial planner) who cites research to describe options strategies as entirely irrelevant. I feel like I'm stuck in the middle trying to sort through it all.
For context:
- I'm not trying to make a buck quickly.
- I'm trying to establish a sustainable, long-term process.
- I am fine with some weekly monitoring, I don't want to be checking trades every day.
- I would options on stock with strong fundamentals and proven track record (no meme stocks, no speculative plays).
I understand that there is some mental capital and operational capital required for options – so I would only apply options if it became apparent the returns over the long-term would be better than only buying and holding on QQQ.
I've been dabbling in CSPs and covered calls over the last month, and the results look good. Of course, one month of results are meaningless
If you’ve traded options this way (or still do), I’d love to hear your experience: Did it genuinely beat buy-and-hold ETFs over the long term?
Do "Basic Options Strategies" (Covered Calls, CSPs, Wheel) Really Beat QQQ Long-Term?
byu/Hack-Nerd-85 ininvesting
Posted by Hack-Nerd-85
3 Comments
A covered call, short put etc. are option structures. By themselves – they are not trading strategies.
From the various backtests that I’ve seen – without leverage – using net credit strategies typically will not outperform just holding QQQ.
If by CSP – you mean that you are just using a cash account – no – it is not likely to outperform. However, the drawdown can better.
No. Covered calls have less risk than 100% equities, so it makes sense they underperform (and they do). This was the most convenient article to grab, but I enjoy a lot of what Benn Eifert says about derivatives and you could listen to him on other platforms as well.
[Benn Eifert Warns on Covered Call ETFs, Says Crowded Trade Lags Stocks](https://www.etf.com/sections/features/jepi-msty-under-fire-hedge-fund-manager-slams-covered-call-etfs)
For selling options, they can give you 18-20% return with lower capital requirements (typically) which isn’t out of the norm. The reason is selling credit spreads and option strategies have more risk than owning stock, so if you trade small and trade often statistics start to play in your favor.
Ive been following tasty trade for years, i dont think they have paid courses but it’s a whole financial network and they have their own trading platform which is good for options.