A strategy where you sell a call option on a stock you already own. You collect the premium from selling the option, but you give up the right to profit if the stock price rises significantly above the strike price. If assigned, your stock will be sold at the strike price.
You own 100 shares of Apple stock worth $150 per share. You sell a call option with a strike price of $160, collecting a $3 premium per share or $300 total. If Apple stays below $160, you keep the stock and the $300 premium. If Apple rises to $170, your stock will be called away at $160, meaning you miss out on profits above that price, though you keep the $300 premium you earned.
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