Covered Call Strategy: Generate Income from Your Stocks
Generate monthly income by selling covered calls on stocks you own. Low-risk options strategy explained.
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Covered Call Strategy: The Complete Guide
Generate monthly income from stocks you already own.
What is a Covered Call?
Covered call = Own 100 shares of stock + Sell 1 call option
Example:
- You own 100 shares of Apple at $180
- Sell 1 call option at $185 strike
- Collect $200 premium
- If Apple stays below $185, keep premium + stock
- If Apple goes above $185, sell at $185 (still profit)
When to Use Covered Calls
Best scenarios:
- Neutral to slightly bullish outlook
- Stock you're willing to sell
- Sideways market
- Generate income on long-term holdings
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Covered Calls Explained: Generate Monthly Income from Stocks You Own
Covered calls let you generate monthly income from stocks you already own. Learn how they work, the trade-offs, how to pick strikes, and the tax implications.