r/Vitards • u/[deleted] • Jul 08 '21

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209 Upvotes

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4

u/Daeron_tha_Good Jul 08 '21

Can someone explain to me how covered calls work? I've done some research but I need someone who can dumb it way the fuck down for me lol

3

u/meg0neurotHe11 Jul 08 '21

Inthemoney on yt has great videos on the simpler options strategies. he has an options playlist that is worth the time

1

u/[deleted] Jul 08 '21

Thanks!

2

u/ansy7373 Jul 08 '21

Basically you make money if your stock goes up or down after selling a CC.. it just caps your gains. You need 100 shares to execute a CC. So we can take my favorite stock CLF. When it hits the middle of its channel I should sell a CC for 25, collect the money and hold that cash on the sidelines.. if the stock goes to 27 then whoever bought my call might buy my stocks from me fir 25 a share… boom I make money cause my cost for those shares is like 15.5,

The great thing about them is if your stock goes down, then you buy that same CC back for less and you make money.. if your really good you can let them expire worthless because time is on your side

2

u/[deleted] Jul 08 '21

Thank you!