I.e. if you hold 1million of qqq and sell at the money 1 year covered calls you get 11% premium. But if the call expires worthless you pay ordinary tax and if it executes you have to sell 1million instead of just 110k.
If I sell covered calls on 100k worth of qqq with expiration in 1 year and it executes, I get to sell 111k at longterm cap. If it expires I just get 11k of ordinary income. So anybody doing this on their own would be capped at 11% gain (while qqqi returns more when qqq is mooning) and wouldn't make shit when marker crashes. If you hold 50% qqqi and 50% qqq, qqqi acts as a much superior version of bond or dividend stock
Idiot, it is only taxed as longterm if it executes. If expires or you close it yourself without selling the underlying syock , it is 100% shortterm. Are you that homo guy boomjoe?