Calls: Buying Covered

To execute this, you must own at least of the underlying stock for every 1 call option contract you sell.

You can either sell calls against stock you already own or execute a (buying stock and selling the call simultaneously). Covered Calls Strategy: Generate Income and Manage Risk buying covered calls

: The Option Premium is yours to keep regardless of whether the stock is "called away" or the option expires worthless. 2. Steps to Buy (Set Up) a Covered Call To execute this, you must own at least

A is a strategy where you sell the right to buy stock you already own to someone else in exchange for an immediate cash payment called a premium . It is "covered" because if the buyer exercises their right, you already have the shares to deliver. 1. How the Strategy Works To execute this

: You use this when you expect the stock to stay flat or rise only slightly.

: You generate instant income (the premium), but you cap your potential profit if the stock price skyrockets above the strike price.