Still learning the ropes here, and want to see if I’m thinking about this correctly. Say I have 100 shares of a stock I would like to hold onto long-term, while at the same time earning some extra money by selling covered calls.
If the implied volatility is greater than the historical volatility, the premium I collect would be more than the lost opportunity cost if the stock spikes up ? (over a large sample size of course)
If the IV is lower than HV, I am not being compensated enough for the risk I’m taking of missing out on an upside swing. Is this correct thinking?