What are the Advantages of Covered Call Writing?

What are the Advantages of Covered Call Writing? Traders and stockholders have found different ways to maximize their earning potential while minimizing their risks. One of the more popular methods that traders utilize in the equity markets is covered call... More

What are the Advantages of Covered
Call Writing?
Traders and stockholders have found different ways to maximize their earning potential while
minimizing their risks.
One of the more popular methods that traders utilize in the equity
markets is covered call writing.
Through covered calls, stockholders write a call option for a
shares of stocks at an agreed price (also referred to as the strike price).
The option buyer can
exercise the option once the option date expires.
Typically, option buyers do so when the price
of the stock has become greater than the strike price.

Stockholders should have at least 100 shares of stocks to be able to write a call option.

In exchange for writing a call option, the call writer receives a premium.
The beauty of this
arrangement is that the call writer can keep the premium and the stock at the same time if the
option buyer does not exercise the call option once the expiration date sets in.
According to
experts, selling stock options can earn a t Less