: 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
: You use this when you expect the stock to stay flat or rise only slightly. buying covered calls
: You generate instant income (the premium), but you cap your potential profit if the stock price skyrockets above the strike price. : The Option Premium is yours to keep
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 buying covered calls