Covered Call Option Strategy

The covered call strategy involves the trader writing a call option against stock they’re purchasing or already hold. Besides earning a premium for the sale, with covered calls, the holder also gets access to the benefits of owning the underlying asset all the way up to the strike price, where the stock would get called away The covered call strategy is usually opened 30 to 60 days before expiration. This allows a trader to benefit from time decay. Of course, the optimum time for implementing the strategy depends on the investor's goals. If the goal is to sell calls and make money on the stock, then it’s best if there isn’t a lot of difference between the stock price and the strike price. If the goal is to sell the stock and the call, then you should be in a position where the calls will be assigned. For this to happen, the stock price will need to stay above the strike price until the expiration