Example two
Here is an actual trade we made:
In March we bought 400 shares of XYZ stock for $23.
We sold an April 22.50 call with a premium of $8.80.
In April, the stock we owned sold for $22.50 (our money back minus $200)
and we banked $3280 for the premium!
We do this every day, and you can do it too!
This is exactly how selling covered options works. Anyone can learn how to do it. You can do it.
IOS Iron Option Strategies
Example one
A good way to understand how to write (sell) a covered call is to look at a real estate analogy:
1. You see a house for sale on your block at a very good price, $100,000. You decide it would be a good investment and buy the house.
2. You know a real extate broker who has a buyer and would give you a $5000 bonus if you would put the house back up for sale for the same price you paid for it for a 4 week period.
3. One week later, the house sells again for $100,000 and you have your original money back plus the $5000 premium.