Options / Covered call
Payoff at expiry for a generic example with the stock at 100. Green is profit, red is loss, dashed lines are break-even prices.
You own 100 shares and sell a call against them. You collect premium and give up gains above the strike.
When it is used: When you hold a stock you expect to move sideways or rise slowly, and want income from it.
Main risk: The shares can still fall, and the premium only cushions a small part of that. You may have to sell at the strike.
- Net credit
- $220 per contract
- Max gain
- +$1,020
- Max loss
- Large (stock to zero)
- Break-even
- 97.8
- Legs
- 2
The legs in this example
| Action | Contract | Strike | Example price |
|---|---|---|---|
| Buy | 1 x 100 shares | ||
| Sell | 1 call | strike 108 | $2.20 per share |
Research that fits this view
Our latest Hold-rated company research, for readers who want to see the thinking behind a neutral view. This is a link to research, not a trade idea.
- HALO: Hold-rated research (published 2026-11-03)
- MNDY: Hold-rated research (published 2026-11-03)
- WLDN: Hold-rated research (published 2026-11-03)
Results for this strategy
We track our own hypothetical examples privately and publish each result at least 30 days after the play has closed, wins and losses together, once there are enough closed plays to say something. None have closed yet. This table will list every closed play with its expiry result and a link to the research it came from.
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