O'Reilly logo

Options Strategies for the Agile Investor (Collection) by Carley Garner, Vadim Tsudikman, Sergey Izraylevich, Michael C. Thomsett

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Practical Considerations in Picking the Covered Call

Michael C. Thomsett

Most traders who take a look at options have heard of the very popular strategy, the covered call. This is a very safe options strategy because it produces a profit better than just owning stock in most of the possible outcomes.

A “covered” call exists when you own 100 shares of the underlying stock and sell a call. Going short on a call is a high-risk idea if you don’t own the stock (a strategy called the uncovered, or naked call write). In the event a naked call is exercised, you have to come up with the difference between the call’s strike and the current market value. For example, if you write a naked call with a strike of 50 and the stock rises to $62 per share at expiration, ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required