Back to overview
NeutralIncome strategyBeginner

Covered Call

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

[object Object]

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

[object Object]
  1. Buy 100 shares of an underlying you like to hold
  2. Sell a call with strike ~5–10% above current price
  3. Choose 30–45 days to expiration
  4. If expires worthless → keep premium and repeat
  5. If assigned → shares sold at strike, realize the gain
[object Object]

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.