What are Covered Call Options?

A covered call option strategy consists of a short call option that is covered by an equivalent long stock position. It is a strategy when you expect the stock price to be neutral or slightly bullish in a short-term period. Using the covered call strategy, you can earn a premium from writing calls while at the same time appreciate all benefits of underlying stock ownership. However, it also limits the profit potential of a long stock position while the risk is still substantial if the stock price declines.

You must ensure that you have sufficient shares in your Positions to open new position for Covered Call Option.