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Buy-Write Option Strategy Generating Nice Profits

"... just in case you end up not picking a winner." This is a key phrase in this article. If you are good at picking winners you won't want to be writing calls for peanuts and having your winners called away. Your portfolio ends up full of losers going down much faster than the call premiums are helping. Then what do you do? Take GE for example. A few months ago you may have bought that juicy dividend stock in the high twenties and wrote some calls. Soon afterward Immelt goes on Mad Money and lies about the company's prospects, then he does a deal with the devil - Warren Buffett. The bad news piles up and you are left with a stock trading at $15-17. What do you do now, write an $18 strike call on your $28 stock? When volatility is high and you got weasels in the chicken coop, this is what can happen. Writing calls on a bunch of seemingly good stocks can never make up for these kinds of losses.
To sum up, if your record shows that you are a good stockpicker, don't sell calls for small returns (You know this already). If you are not a good stock picker but are intrigued by this technique, buy a fund that specialises in buy-writes and be satisfied with an average return.