Neutral / slightly bullish
Covered Call
Earn income on shares you already own.
Hold 100 shares and sell a call against them. You collect the premium as income; in exchange you cap your upside at the strike. A favourite for generating yield on a stock you're happy to hold or sell.
Construction
Own 100 shares + sell 1 call.
Max profit
Premium + gains up to the strike
Max loss
Large (stock can fall to 0), softened by the premium
Breakeven
Stock cost − premium
Play with the payoff
Neutral / slightly bullish
At expiryToday (30d, 30% IV)
Max profit
$5.00
Max loss
−$95.00
Breakeven
$95.00
Best when
- You own the shares and expect them to drift sideways
- You're happy to sell at the strike
- You want regular premium income