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Stop Calling the Covered Call an Income Strategy. Here Is What It Really Does.
NowPress play to follow along0:00 / 8:05
Chapters3 segments · tap to seek
ticker lesson
Breakdown
0:00lesson
Covered call basics — long stock + short call
- Long stock + short call
- Reduces cost basis
- Lower risk
- Higher potential profit
2:10GM· ticker
General Motors — 5% OTM, 2.7% cost basis reduction
- 5% OTM
- 2.7% cost basis reduction
- 32-day expiration
- Liquid options
4:33lesson
Selecting covered call options — liquidity, OTM, expiration
- 30-50 days to expiration
- Liquid options
- 5% OTM
- 2-3% cost basis reduction
- Balance profit vs. cost basis
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