Buying Covered Calls at Buying

Buying Covered Calls. Net gains from covered calls may be subject to capital gains tax. And like before, you’ve earned $308 from the covered call.

A covered call involves owning 100 shares of a stock and then selling a call option against it. The covered call option is an investment strategy where an investor combines holding a buy position in a stock and at the same time, sells call options on the same stock to generate an additional income stream. Because you’re using your opinion to buy 100 shares of stock as leverage to sell covered calls.

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A covered call involves owning 100 shares of a stock and then selling a call option against it. Buy write vs covered calls. You can also buy a long call on pretty much any stock, while you can only sell a covered call on a stock you already own. Apart from stocks, covered calls are used for the trading of the options contract.