Writing covered calls is a conservative investment strategy, but it also can be profitable. To write an option means to sell it to someone else. You are not selling your stock, but the right to purchase it at the strike price. This investment is considered safe because you have the option “covered” by owning the stock. Many people do not own the stock for the options that they sell. By owning the stock from the options, you have definite advantages over the average options trader. Here are some reasons to consider writing covered calls as your next trading strategy.
