Options & Bonds
What is Covered Call?
Selling someone else the right to buy your stock at a higher price
Full Explanation
If you own a stock, you can sell a call option against it to collect premium income. If the stock stays below the strike, you keep the premium. If it rises above, you sell your shares at the strike price.
Real-World Example
Own Apple at $170. Sell a $185 call for $3. Keep $300/contract if AAPL stays under $185.
Pro Tip
A great way to generate income on stocks you plan to hold. But caps your upside if the stock rockets.
Related Options & Bonds Terms
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