covered call strategy
16/05/2022 Financial & Legal Services
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Description
A Covered Call Strategy can be used in this situation. In this case, the investor sell a call option on a stock he owns. This will net him a premium. The Call Option is sold usually in an OTM ( Out of The Money) call. The Call would not get exercised unless the stock price increases above the strike price. Until then, the investor in the stock (Call seller) can retain the Premium with him. This becomes his income from the stock. This strategy is usually adopted by a stock owner who is neutral to moderately bullish about the stock.
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