Selling covered calls can be a good strategy as long as you select a strike price at which you would be willing to allow your holding stock to be called away. The covered call will help generate income during the holding period and lowers the original position’s cost basis.
A covered call consists of selling a call against shares of holding stock. Typically, covered calls are sold out-of-the-money above the current price of the underlying asset.
| Side | Price | Filled | Realized P&L |
|---|---|---|
| Sell Open | 0.53 1Lot(s) | +41.51% Holding |
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- NEXTTOME·10-31149 works only if that upside cap feels acceptable; delta and ex-div timing matter more than the premium here1Report