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Glossary · Options

Covered call

Owning 100 shares and selling a call against them for income.

Why it matters

You get paid now in exchange for capping your upside at the strike. A popular way to earn extra yield on stocks you plan to hold.

How to read it

Sell calls around 25 to 35 delta, 30 to 45 days out.

Related

Call optionThe right to buy 100 shares at the strike price before expiration.Cash secured putSelling a put while holding the cash to buy the shares at the strike.

In the Cluenex app, this explanation opens next to every covered call figure, with the live reading for the stock you are looking at. Open it in Cluenex