Works great until it doesn't. You haven't specified OTM, ATM, or ITM calls. If you sell ATMs or OTMs and don't think a stock can lose 15%-25% of its value, you're just dreaming. If you sell ITMs a year out you'll get the dividends and a very, very small premium. And you'll be vulnerable to early callout in the event the stock rises some and somebody out there wants it bad enough.
I sell covered calls myself. I usually hate myself for doing so, it's a chicken play, if you are going to hold a stock for a year you have maybe 90% of the downside exposure of holding the straight-long stock and throw out the upside.
I will tell you two things with 100% certainty:
1: If EVER you buy a stock with THE STRICT INTENTION of selling CCs on it, in other words, ONLY because it appears to offer a nice premium, you are about to make a bad mistake.
2: A "buy-write", eg; buying a stock and immediately selling covered calls, without waiting for the stock to rise over your buy price, is the freaking dumbest move you can possibly make in the market, bar none. What you sell that call for--is EXACTLY what it is worth, less your comm and the spread. It's like buying 10 bananas for $10 and selling one to a friend for 70 cents.
Read my Jan 3 post ...BGC was $30 and the Jan 2014 $30 calls sold for $4+
I have a running RECAP on the AAPL message board....this time last year, the stock was $600 I suggested selling the Jan 2013 $600 calls for $80 - $100 but closing them out at $40 only to sell the JAn 2014 $600 calls for another $80 in the Summer for a net of $125+..this helped the sting of this "manufactured" dive....$600 - $125 = $475. Now I could close the Jan 2014 $600 calls ofr $20 for a profit of $60 only to resell them again after the next RUN