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Understanding Options 2E, 2nd Edition by Michael Sincere

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6

Step-by-Step: Selling Covered Calls

In this chapter, we go through the actual steps of selling covered calls. Believe it or not, this is the easiest part of selling a call. The brokerage firms have spent millions of dollars to make the buying and selling of options as simple as possible—some might even say fun.

You’ve already signed the options agreement with your brokerage firm. I assume you already own a stock and want to sell calls on it.

Before we get started, however, let’s discuss some of the risks of selling covered calls. Don’t worry—I’m not trying to talk you out of trading. Although selling covered calls is considered a conservative strategy, it can also be risky. Unfortunately, no options strategy is completely fail-safe, including ...

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