When to Sell A Covered Call Option

You can sell a covered call option when you want to take advantage of time decay or high volatility in order to gain an income from a position that you are currently holding.

You would sell covered call options when for some reason think the underlying stock will remain more or less at the same price. Also, you could put time decay on your side by selling out-of-the-money options. Finally, you sell an option when the volatility for that option is high.


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