In a previous article, I presented an option strategy – Selling Cash Covered Put Options. This could be used to generate extra income while you wait for the stock to come down to your desired purchase price.
In this article, I present another conservative option strategy that can be used to generate extra income from your existing stock holdings. The strategy is simply to sell a covered call on your stock. Let’s first look at what a call option is and then see the strategy in action with an example.