Covered Call

A covered call is an options strategy where an investor who already holds shares of a stock sells (writes) a call option on the same stock, collecting the option premium as income. If the stock price stays below the call's strike price at expiry, the option expires worthless and the investor retains both the shares and the premium—generating income from their existing position. If the stock rises above the strike, the shares may be called away (sold at the strike price), capping the upside. Covered calls are one of the most widely used conservative options strategies in India, allowing long-term equity investors to generate additional income from their portfolios during periods of low expected price movement.