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Income strategyBeginner

Covered Call

Sell one call option per 100 shares you already own, generating extra premium income.

When to use

When you already own shares and expect sideways or slightly rising prices. Best during high implied volatility.

Step-by-step

  1. 1

    Buy 100 shares of an underlying you like to hold

  2. 2

    Sell a call with strike ~5–10% above current price

  3. 3

    Choose 30–45 days to expiration

  4. 4

    If expires worthless → keep premium and repeat

  5. 5

    If assigned → shares sold at strike, realize the gain

Example

You own 100 Apple shares at 180 USD cost basis. Current price 195 USD. You sell a 30-day 205 call for 3.20 USD per share (= 320 USD). If AAPL stays below 205 → keep premium and shares. If above → sell at 205 with 25 USD/share profit plus the premium.