Avoid writing covered calls over a period of earnings announcements because sudden price changes can occur.
It's best to write at-the-money options unless you are consciously trying to play the market going up (out-of-the-money) or trying to be more conservative for safety (in-the-money).
Don't try to over trade by attempting to get every last $0.05. Covered call writing is NOT a day-trading strategy. It involves monthly or quarterly time frames not hourly.
Be consistent, work it every month. The objective is to do ten trades at 4% not two trades at 20%. Don't try to over push the return.
When writing out of the money options, consider writing at least 30 days before the option expiration date to get a better selling price.
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When looking for a buy/write investment opportunity be sure you have considered all the investments that meet your risk profile. Why invest your money to get a 7% return when a 15% return is available. PowerOptions will help you with this.
Consider rolling your option positions before expiration if you can get your targeted profit. If you wait until they expire, you will be in the market trying to sell them again with everyone else. The prices will be depressed.
If you think the market or a stock is on the way down, write deep in the money options.
If you think the market or a stock is on the way up, write out of the money.
Set a firm profit target (Return %, Annual return %, or dollars) and stick to it. Don't make a trade unless you make money.
Don't panic if one of your stocks goes up and your options are all in the money. You can always roll the option out (another month or two) or up (go to the next higher strike price). And you will probably make money doing it.
When you do a Buy/write covered call for a riskier stock, let the option expire. Don't get greedy and roll it again. Take your money and find a new buy/write.
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Covered Call Rules of Thumb - Covered Call Trading Rules of Thumb - Covered Call Trading Tips