Risk: LowNeutral to mildly bullishBeginner

Covered Call

Monthly income from your stock positions

In a covered call, you sell a call option against shares you already own. You immediately receive a premium credited to your account, regardless of how the stock moves. In return, you agree to sell your shares at the strike price if the option goes in-the-money at expiration. This strategy is ideal for investors who want to generate regular income from existing positions in flat to mildly rising markets.

Risk

Low

Market view

Neutral to mildly bullish

Complexity

Beginner

Underlyings

Full Strategy Guide

Advantages

Immediate cash flow from premium received
Effectively reduces the cost basis of the stock
Maximum loss clearly defined (stock can only fall to zero)
Simple to implement — ideal for options beginners

Risks

Caps upside: profit potential above the strike is surrendered
No full downside protection if the stock falls sharply
Dividend rights remain but early assignment risk around ex-dividend date
On thinly traded options the spread eats into the premium

Timing

When to Use

1IV Rank above 30% — higher IV means richer premiums

2Neutral to mildly bullish outlook on the underlying

3Already holding a stock position in the account

4Willingness to sell shares if the stock rallies to the strike

5No upcoming earnings event within the option term

65 examples

Covered Call on 65 underlyings

Each stock with its own example trade, strikes, premium, break-even, and interactive payoff diagram.

German & European stocks

· tradeable on Eurex

TechMedium IVIV 26–48%

IndustrialsLow IVIV 17–28%

FinanceLow IVIV 14–25%

AutoMedium IVIV 22–38%

AutoMedium IVIV 20–35%

FinanceHigh IVIV 28–55%

ConsumerMedium IVIV 22–38%

TelecomVery low IVIV 14–22%

MaterialsMedium IVIV 22–38%

IndustrialsHigh IVIV 35–60%

View example

Lufthansa

LHA.DE

IndustrialsMedium IVIV 30–45%

ConsumerHigh IVIV 35–55%

AutoMedium IVIV 25–40%

AutoMedium IVIV 25–40%

EnergyHigh IVIV 35–55%

IndustrialsLow IVIV 20–32%

EnergyLow IVIV 20–30%

EnergyMedium IVIV 25–38%

FinanceMedium IVIV 28–42%

FinanceLow IVIV 18–28%

View example

US stocks

· high options liquidity

AutoVery high IVIV 50–95%

View example

Amazon

AMZN

ConsumerMedium IVIV 25–42%

TechMedium IVIV 22–38%

TechVery high IVIV 55–90%

View example

Netflix

NFLX

ConsumerHigh IVIV 30–60%

View example

JPMorgan

JPM

FinanceMedium IVIV 20–34%

View example

Bank of America

BAC

FinanceMedium IVIV 24–40%

View example

Goldman Sachs

FinanceMedium IVIV 22–36%

View example

ExxonMobil

XOM

EnergyMedium IVIV 20–34%

View example

Coinbase

COIN

FinanceVery high IVIV 65–120%

View example

Visa

FinanceLow IVIV 16–26%

View example

Disney

DIS

ConsumerHigh IVIV 25–42%

View example

MicroStrategy

MSTR

Crypto-ProxyVery high IVIV 85–160%

View example

Novo Nordisk

NVO

ConsumerMedium IVIV 30–52%

View example

Rivian

RIVN

AutoVery high IVIV 60–100%

View example

Supermicro

SMCI

TechVery high IVIV 55–100%

View example

Rocket Lab

RKLB

IndustrialsVery high IVIV 60–110%

View example

IonQ

IONQ

TechVery high IVIV 70–130%

View example

Plug Power

PLUG

EnergyVery high IVIV 70–120%

View example

Robinhood

HOOD

FinanceHigh IVIV 45–75%

View example

Ford

AutoMedium IVIV 30–45%

View example

Boeing

IndustrialsHigh IVIV 30–50%

TechMedium IVIV 30–45%

View example

Broadcom

AVGO

TechMedium IVIV 30–45%

View example

Qualcomm

QCOM

TechMedium IVIV 30–45%

View example

Chevron

CVX

EnergyLow IVIV 22–35%

View example

GameStop

GME

ConsumerVery high IVIV 80–180%

View example

AMC

ConsumerVery high IVIV 90–200%

View example

Lucid

LCID

AutoVery high IVIV 70–120%

View example

NIO

AutoVery high IVIV 60–100%

View example

SoFi

SOFI

FinanceHigh IVIV 50–80%

View example

MARA

Crypto-ProxyVery high IVIV 80–140%

View example

Riot

RIOT

Crypto-ProxyVery high IVIV 80–140%

View example

CleanSpark

CLSK

Crypto-ProxyVery high IVIV 90–150%

View example

Index ETFs

· highest liquidity worldwide

FAQ

Frequently Asked Questions

How do I choose the right strike for a covered call?

The strike should be 3-8% above the current price (out-of-the-money) so you can still participate in some upside. A popular approach is the 30-delta rule: choose the strike where the option delta is around 0.25-0.35. Higher strikes offer less premium but allow more upside. Lower strikes provide more premium but increase the likelihood of assignment.

When should I roll a covered call?

Rolling makes sense when the option is moving toward the money and there are 7-14 days until expiration. You buy back the old call and sell a new one with a later expiration and possibly a higher strike. A common rule: roll when the sold option shows a loss of 150-200% of the original premium. Never roll just to hide a loss — if the stock fundamentals have deteriorated, close the position entirely.

What happens if my stock rises above the strike and I get assigned?

For American-style options (US stocks), assignment typically happens only at expiration. Your 100 shares are sold at the strike price and you keep the full premium. Your total gain is (strike − purchase price + premium) × 100. For European-style options (e.g., SAP options on Eurex), settlement only occurs at expiration — no early assignment is possible.

Do covered calls work on DAX stocks too?

Yes, covered calls on German stocks like SAP, Allianz, or Siemens are tradeable on the Eurex. Liquidity is decent for major DAX stocks but typically lower than US options. Bid-ask spreads are wider, slightly reducing effective premium. Eurex single-stock options are generally European-style with physical settlement — always check your broker's contract specifications.

How much premium can I realistically expect from covered calls?

For stable stocks with lower IV (15-25%), expect typically 0.5-1.5% of stock value per month. For more volatile stocks (IV 30-50%), it can be 2-4%. Annualized, this represents 6-18% in additional yield. These premiums are not guaranteed and vary greatly with market volatility. In calm markets (VIX below 15), premiums drop significantly.

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