I fell victim to that emotion when I was up 20%. I got greedy. That can turn a winner into a loser in the blink of an eye. I kick myself a little less for not taking profit, however, because I stayed true to my options strategy, even though I knew it might result in not only having my shares called away, but at less than market price.

I have written Pandora covered calls a total of six times in recent months. That covered call writing generated about $832 worth of income. For the record, I bought calls back for a gain three times, had them expire worthless twice and was assigned on the transaction this past weekend.

Factor that $832 into the proceeds from my sale of Pandora shares at $9.00 and, not including transaction costs, I made money on the position. Thanks to aggressive covered call writing, my would-be double-digit loss is actually a 1.9% gain. Throw commissions in the mix and I'm slightly above breakeven.

It doesn't always work out quite so textbook, but with some discipline that includes sticking to a covered call options strategy, you set yourself up for less pain -- or not much pain at all -- when a speculative play hits speed bumps.

At the time of publication, the author was long P and YHOO.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Rocco Pendola is a private investor with nearly 20 years experience in various forms of media, ranging from radio to print. His work has appeared in academic journals as well as dozens of online and offline publications. He uses his broad experience to help inform his coverage of the stock market, primarily in the technology, Internet and new media spaces. He has taken a long-term approach to investing, focusing on dividend-paying stocks, since he opened his first account as a teenager. Pendola, 37, is based in Santa Monica, Calif., where he lives with his wife and child.

If you liked this article you might like

Equifax Breach Reveals Frightening Truth: Companies Can Delay Disclosing Hacks

How Alibaba's 'Genie' Smart Speaker Can Overcome the Amazon Echo's 3-Year Head Start and Still Win

Facebook, Apple, Netflix and Google Have Caught the Flu -- Here's How Not to Get Killed By It

How to Play the Coming 'FANG Flu'

Travis Kalanick and the Terrible, Horrible, No Good, Very Bad Week