How Does a Covered Call Work

30/05/2025 2 min
How Does a Covered Call Work

Listen "How Does a Covered Call Work"

Episode Synopsis

A covered call works by holding a stock and simultaneously selling a call option on that same stock. This strategy allows the investor to earn a premium from the option sale while still owning the underlying shares. If the stock stays below the strike price, the investor keeps both the stock and the premium. If the stock rises above the strike price, the shares may be sold at that price, capping upside gains but still resulting in a profit.:-https://navia.co.in/blog/anatomy-covered-call/