What is a Covered Call Strategy?
What is a Covered Call Strategy? Let’s consider that you are an investor or you own a property Now We will go over a Covered Call Strategy to see how you can profit. In property contest : Imagine you own a property and want to rent it out and even ready to sell the property at predefined price. In this case you will bet on a particular price and if the price is achieved or over achieved then you have to sell the property at predefined price. Imagine you own shares of a company. You feel the stock may rise in the long run but not much in the near term. You would still like to earn an income from the shares in the near term though. Suppose you are holding 100 shares of ABC company trading at Rs 50 in May. You are bullish on your holdings but are also worried about the downside i.e losses if there is fall in the price. In such a scenario, you can implement a Covered Call option strategy by selling...