Well.. aside from the risk equivalence, the `essential' difference between selling a covered call and selling a put is that with one, you sell a call on an underlying you own but wouldn't mind to depart from, while with the other you sell a put on an underlying you do not have, but wouldn't mind to own. Regrettably, your Friend's experience illustrates just that, but even more so, the real serious risk of the CC strategy—is that many (including brokers and money managers), falsely believe that it is a much much safer strategy than selling puts—and therefore it is more `acceptable'.
~BBen
--- In OptionClub@yahoogroups.com, "Jeff" <jeffloeb@...> wrote:
>
> Gis,
>
>
>
> I know someone that had a broker that put her in ETF's and then wrote
> covered calls as she needed monthly income. He managed to take $400,000 and
> turn it into $250,000 in 3 years.
>
>
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> jef
>
>
>
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