covered calls

On this page you can find detailed information on covered calls – it is an option strategy that has a bullish or neutral outlook and it is considered very simple, so even novice traders can succeed when selling covered calls.

Depending on your preferences, covered calls (CCs) can be used as a single strategy or can be included in more complex option strategies, e.g. covered strangles or option wheel strategy.

CC helps earn additional income on shares you already own and increase your cash flow. It is reached thanks to a premium collected by selling a call option (at-the-money or out-of-the-money)

One of the main advantages of writing covered call strategy lies in the fact that it can be applied in different market conditions. It’s easy to choose appropriate stocks for the strategy, then it’s simply easy to manage it, and you can also get additional bonus if you trade dividend stocks. You can find this list in the CSP screener by 5Greeks.

Many traders use covered calls after a cash-secured put. This advanced strategy is called wheel options.

After reading this material you’ll figure out how to adjust this strategy with the maximum benefit.