Important legal information about the email you will be how to trade covered calls you write. By using this service, you agree to input your real email address and only send it to people you know. It is a violation of law in some jurisdictions to falsely identify yourself in an email. The covered call strategy is an excellent strategy that is often employed by both experienced traders and traders new to options.
You will need to be approved for options by your broker prior to using this strategy, and it is likely that you will need to be specifically approved for covered calls. Widely viewed as a conservative strategy, professional investors write covered calls to increase their investment income. But individual investors can also benefit from this simple, effective option strategy by taking the time to learn it.
One of these is the right to sell your stock at any time for the market price. Covered call writing is simply the selling of this right to someone else in exchange for cash paid today. This strategy is defined and explained with a preview example. Possible outcomes and associated risk are discussed. For the best experience, please update your browser with the latest version.
Thank you for visiting Scottrade.com. We have implemented a Skip to Main Content link and improved the heading structure of our site to aid in navigation with a screen reader. We are consistently making improvements to the accessibility of our site. Short CallsWriting a call can be risky depending on whether your position is covered or uncovered.