The problem with so called "covered" writing is all in the mind.

Imagine someone holds $100,000 worth of stock at $10 per share, and there is a serious chance they might go bust this year.

He could dump his stock, and lodge the proceeds to cover a written put position equal to the sold stock. The risk is exactly the same as if he just held the stock in the first place, but he collects the premium. He does not get any upside, because the stock has already been sold.

(2) You Hold the stock, and there is a chance it will double or drop near zero. You hold onto the stock, and write call options against them.
You don't partake of the upside, as a rally will see your stock called away at the strike price. If the stock falls to zero you still lose the $100,000 you put into it.

The only advantage is the premium received at the outset. If this premium is great indeed, then the percentage play might make such a trade worth a shot.

How much interest would you charge the next 10 people you walk past on the street who want to borrow $1000 off you?
I would hope your answer is different for each and every person.. Price discovery on Premia has to be the same in a perfect market.

If the market is NOT perfect, then the option in question is either too cheap or too expensive.

If the former, buy it no matter how much you don't like long option positions.
If the latter, consider selling it, but be aware that being forced to hold onto collateral stock or the pile of money needed to take up the stock is an additional RISK that only millionaires are daft enough not to include in their calculations.

It comes back to that old idea "Would you bet everything you had on a flip of a coin if you got 10-1 odds?

A gambler would, because the odds as so good.
A risk manager would not, because there is a 50% chance he'll be busted.

The upsets in the market place are caused by people underestimating risk - especially the Black Swan type!

A big risk with only part of your money may be well worth taking because it represents a 10-1 gain on a 50:50 proposition in my example, but for the many people to whom $100,000 represents their entire investment capital - it is most certainally NOT worth taking the risk - I wouldn't and I'm a gambling man myself - just not one worth the millions needed to brush off a possible $100k hit as a "bad day".

Last day of my life more like!