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Old September 5th, 2011, 03:35 AM
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pieinthesky pieinthesky is offline
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If you own shares, selling covered calls on them is a low risk way to generate income. The main danger is if the stock really takes off - you lose the difference between the strike price and the market price. You still make a profit, but less. The best scenario is when the stock does not reach the strike price. After the option expires, you keep the premium and the stock, and you can repeat the process. Best stocks for this trade within a regular, predictable range. Sell the calls when the shares are at the high end of the range,
 

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