Pretty well timed call simulpalo68, the actual low coming just a few days after your post and a dollar or more lower. It looks like the royalty legislation may take a few more percent off the top, but it looks like with silver catching a bid at last that higher prices are on the horizon for the shares as it breaks above a long term downtrend.
...."it also gives me downside protection to $17.24" - this should read "OR it gives me downside protection to $17.24." Important difference is that between "also" and "or". If price declines to $17.24 your nice 6.7% premium offsets price decline..you make nothing. The problem is, and probably the one the managers of CEF are facing, is if the price declines at a greater rate than 6.7% at any time during the period between now and February expiration. Two down days of 3% and the position will be well into the red as the decline in the option will only be about half the decline in the stock, especially if the decline occurs early in January, in this case.
A position that involves the sale of covered options, which limits upside potential to in your case with GDX to about 6.8%, while presenting exposure far greater than 6.8% on the downside, ultimately is a losing game....as we are witnessing in GGN..
The natural reaction in the event of a decline below your "protection" is to roll down your strike in order to get more premium, hence more protection. Then in the event of a rally you are called away at a price below your initial purchase, your incur a loss on the stock, maybe you earn enough premium overall to offset the stock price loss...maybe.
I think the only way to prosper in this game is to be right with respect to the level the stock might drop...say maximum $16 for GDX....and repeatedly sell the $18.50 calls regardless of where the issue is priced at roll over time, whether above or below. Sometimes you'll get high percentage premiums (or protection) other times low; but moving the strike price about up or down is the big mistake either in the event of a loss in the stock's value or a gain...
(Of course in the case of an outsized move say to $25 in GDX you might wish to move up to the $20s or $22s.)
Covered options sales is a much trickier game than it is sold to be. Premium collection and protection are the same; one or the other - , Good fortune to you