There are studies on covered call writing. It's often not as profitable as holding the stock outright. The market trends up, but not in a uniform manner.
Benesh and Compton,
HISTORICAL RETURN DISTRIBUTIONS FOR CALLS, PUTS, AND COVERED CALLS
Read the study yourself, but I found this interesting:
"Thus, on average, covered calls produced lower mean HPRs [Holding Period Returns] than those of the underlying stocks."
"Covered calls represent a conservative strategy aimed at generating some extra income and downside protection in return for giving up some of the upside potential on the stock. In other words, covered calls should exhibit less variability in returns than do the underlying stocks.
The empirical evidence confirms this relationship as the standard deviation of the HPRs for CCs are 5.8 percent for the ITM sample, 8.7 percent for the ATM sample, and 11.8 percent for the OTM sample, versus approximately
15 percent for the underlying stocks in each case. A comparison of the minimum and maximum returns for the CCs versus the underlying stocks also reveals a smaller range for the HPRs of CCs. However, much of the reduction in the range is due to the reduction of maximum returns as opposed to higher minimum returns."
[SIZE=-1]www.studyfinance.com/jfsd/pdffiles/v13n1/benesh.pdf[/SIZE]
But we're all above average here.
Benesh and Compton,
HISTORICAL RETURN DISTRIBUTIONS FOR CALLS, PUTS, AND COVERED CALLS
Read the study yourself, but I found this interesting:
"Thus, on average, covered calls produced lower mean HPRs [Holding Period Returns] than those of the underlying stocks."
"Covered calls represent a conservative strategy aimed at generating some extra income and downside protection in return for giving up some of the upside potential on the stock. In other words, covered calls should exhibit less variability in returns than do the underlying stocks.
The empirical evidence confirms this relationship as the standard deviation of the HPRs for CCs are 5.8 percent for the ITM sample, 8.7 percent for the ATM sample, and 11.8 percent for the OTM sample, versus approximately
15 percent for the underlying stocks in each case. A comparison of the minimum and maximum returns for the CCs versus the underlying stocks also reveals a smaller range for the HPRs of CCs. However, much of the reduction in the range is due to the reduction of maximum returns as opposed to higher minimum returns."
[SIZE=-1]www.studyfinance.com/jfsd/pdffiles/v13n1/benesh.pdf[/SIZE]
But we're all above average here.