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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