This is true, but it cuts into margin and you are limited to the upside. If you really think a stock is going to take off you buy the calls. I write Puts and enjoy the cash flow, but it does tie up my money.
Absolutely agreed. I bought a bunch of Oct calls today. Looking to cash in after news of the dividend increase. May hold them until news of the end of September dividend as well (hence, why I bought Oct calls and not Sept calls). Could get yet another dividend increase then as well!