Covered calls: income with a cap
Work out the payoff of owning shares and selling a call against them.
Module 12 of 26, Options for beginners, in practice. Lesson 2 of 6, about 16 minutes.
The takeaway
Selling a covered call collects a known premium upfront in exchange for giving up the chance of large gains. The premium is certain; your profit is not, because the shares can fall and wipe out the gain.
This page is a public summary. The full lesson has the worked examples, an interactive exercise and a short quiz, and sits in the course. Lessons 1 and 2 of Module 1 are free and the rest need a pass.
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