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Investment
Covered Call
Owning shares of a stock and selling call options against them to collect extra income.
Covered calls are a popular income strategy for long-term stock holders. They increase yield but cap the upside if the stock surges. Many retirees and conservative investors use them regularly.
It's renting out the upside of your stock for a monthly fee while still owning the shares.
Real world: You own 100 shares of Microsoft at £380. You sell a call option with a £400 strike and collect £600 premium. If the stock stays below £400 you keep the shares plus the premium. If it rises above £400 the shares get called away but you still made a profit.
💡 Covered calls turn boring long-term holdings into income-generating machines.