Karen also experiences large swings in returns, with losses of more than 4% within a month, but the upside returns have been much greater than the adverse returns.
Naked calls and puts can have their place in your portfolio but for the average retail trader with $100K or less in their account, it would be very difficult to replicate Karen.
The risk of blowing out your account is pretty high.
(1) The interest rate is very low and you are paying it to yourself instead of to a bank.
So the loan is essentially free to you, other than a small administrative charge.
Karen strategy is very risky as implied volatility can rise and markets can accelerate wiping out huge amounts of capital generating significant margin calls.