Part 2/8:
Understanding the Covered Call
At the core of the covered call strategy lies the purchase of 100 shares of a stock, followed by selling a call option against those shares. The goal is to earn premiums—that is, money paid by buyers of the call options—on top of any potential stock appreciation. Tragically, this requires a hefty investment, which is often unattainable for novice traders or those trading through platforms like Robinhood.