articles on covered call options

[mrbaseball]

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For example, KO is $54. The October $57.50 calls last traded for twenty cents

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KO is a bad example because it is a very low volatility stock. I own Coke and have never written options against it and never will for this very reason and I am a serial covered option writer.

It all comes down to what you are trying to accomplish. Take something a bit more volatile for example. AAPL closed at 136.76 today and the Sept 140 calls closed at 4.16. If that gets called away in a couple of weeks you just made 5% in less than a month. If it doesn't you bought the stock 4 bucks cheaper than otherwise and you can sell some more against it next month.

Covered call writing is more of a trader than investor mindset. To each is own. Both strategies can work well if you know what you are doing and what you are trying to accomplish.