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The covered call strategy can be used as a reasonable hedge for lower volatility securities. The hedge exists as the premium that is received to lower the cost basis / break-even point of your holdings... but you are only hedged by that amount. It is a great means to generate income on your holdings and act as a 2nd dividend or 2nd income on the shares in your account.
Regarding the Money on the Table Report... The sell-to-open call enters you into an obligation to potentially deliver your shares of stock at the sold call strike price. If you wanted to hold the position long term and not worry about rolling or adjusting the call too often, you would likely just stay with Out of the Money (above the current underlying price) looking for a lower probability of assignment. This would mean a lower premium and thus a lower hedge.
The Conservative approach means you would be selling a call In the Money to begin with, below the current price. This gives a higher premium due to the intrinsic value and time value of the option premium. However, if you do not want to have your shares assigned you would need to roll the call up to a higher strike price and further out in time. This might cost a higher premium than you initially received.
The covered call strategy is a popular and potentially valuable instrument for shares of stock that you own. Note: The most efficient hedge against an optionable stock or ETF in your account is the Married Put strategy.
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