Buying Covered Calls Apr 2026

: 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. buying covered calls

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

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