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Covered Calls Education - Best $25 You Will Spend This Week
I have made over $5,000 selling options. 🧵
Here is how I do it:
For a full educational course on this content, see: https://investorinsight.gumroad.com/l/MasteringCoveredCallsandCashSecuredPuts?_ga=2.120937736.1430509675.1676953565-1783219656.1675631494&_gl=1cl1lio_gaMTc4MzIxOTY1Ni4xNjc1NjMxNDk0_ga_6LJN6D94N6*MTY3Njk1MzU3NC40LjAuMTY3Njk1MzU3NC4wLjAuMA
The two strategies I use are Covered Calls & Cash Secured Puts.
This thread focuses on Covered calls:
Selling calls gives you the right to sell your shares at a certain price and date.
While doing so, you get paid also known as collecting a premium.
This is a basic overview of how the covered calls process works:
- Own 100 shares
- Sell a Call
- Collect Premium
- Wait for Expiration
- Rinse and Repeat
Let's get into the details:
To deploy this strategy, you must own 100+ shares of the stock/ETF.
100 shares of $SOFI will cost you ~$700.
100 shares of $TSLA will cost you ~$20,800.
100 shares of $QQQ will cost you ~$30,100.
100 shares of $NIO will cost you ~$1,000.
Now that you own the 100 shares, you can sell covered calls against those shares.
The goal is to sell a strike higher than the expected value of the asset by the expiration date. If the share price ends ABOVE strike price, you are required to sell shares at the strike price.
If we take $QQQ for example, the current share price is $301.50.
To sell a call, you go to the options chain & select "sell" "call".
From there, you can choose the strike price & expiration.
My ideal strike/expiration is 1 week out between .2 - .3 Delta.



In this example, the Delta is .25 & the premium is $1.20.
This means you will get paid $120 to sell this covered call.
Delta = Probability that this contract with expire “in the money.” This means there is a 25% chance $QQQ will be above $307 by 02/24. 

Potential outcomes in this example:
- The price of QQQ goes above $307 by 2/24. You are required to sell shares at $307 & you "miss out" on gains.
- The price of QQQ stays below $307. You keep the premium and all 100 shares. This is the ideal situation!
- You buy back the contract for more or less than the premium collected if the share price climbs or tanks.
This is called “buying to close” the option.
This is often used when the contract is now worth $1, and you want to sell another option for the following week.
What are some of the risks?
- If you sell a covered call for less than your entry and it expires in the money, you will sell your shares for less than your entry.
- The share price climbs and you have to sell your shares even though you wanted to hold them for years ahead.
Covered calls are not risk free but can provide your portfolio downside protection or an exit strategy on long term holdings.
Gumroad
Mastering Covered Calls and Cash Secured Puts
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