I was thinking of ways to generate passive income, and had a situation I wanted to run by other people to get opinions on what I might be missing.
Assume I have a retirement account with a decent chunk of money in it. My investment strategy is simply to put it in an S&P500 mutual fund and forget about it. Would it make sense to sell the S&P500 mutual fund (since I can't trade options against it), buy something like the SPY ETF, and then write covered calls against that to collect premiums each week/month? The thinking being that since I'm going to own that ETF long term anyway, I don't really care if it goes down and I'd collect the options premiums as a passive income stream. In the event I get called away, I could simply buy it back and repeat the process.
Am I missing anything with this strategy?
Submitted July 21, 2023 at 05:47PM by PlumFister https://ift.tt/pWmM4wb
