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PowerOptions Tutorial...
This call options tutorial will take you through the basic concepts of option investing and how you can use PowerOptions to help you make money with covered call options. When you finish this tutorial go to the Easy Startup guide for a step-by-step tour of PowerOptions.
What is a Covered Call?
You (Stock Owner) An Option Buyer
1) Agree to sell your stock at a price (strike price) for a specific amount of time (option expiration month).

2) Receive a premium from a buyer for their right to buy your stock, you keep this premium no matter what happens.

3) If the covered call option is assigned at expiration, you realize a profit or loss depending on the price you bought the stock and the strike price of the option.

4) If the covered call option is not assigned at expiration, you keep your stock and can sell another option for more cash income.
1) Has the right to buy your stock (at the strike price, for the specified time, and

2) Will pay you a premium (price paid for the purchase right).

3) If the stock price is above the strike price of the option, your stock will be bought from you at the strike price of the option, this is called assignment or exercising the option.

4) If the stock price is below the strike price of the option, the option expires worthless, the buyer loses the premium that was paid for the right to buy your stock.
Steps to do a Covered Call:
  1. Buy one of the 4,500+ stocks or ETF's that has options available. (List of optionable stocks)
  2. Decide if you want to be conservative or aggressive (risk) with your strategy.
  3. Choose a covered call option which matches your risk choice. Out of the money is more aggressive, in the money is more conservative.
  4. Sell that covered call option on the stock.

Covered Call Options - Writing Covered Calls - Covered Call Strategies

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Covered Call Options - Writing Covered Calls - Covered Call Strategies
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