Part 4 Learn Institutional Trading

Covered Call – Best for Slow Uptrend or Range-Bound Markets

A covered call is one of the safest option strategies and perfect for long-term investors who already hold stocks.

How it works

You own shares of a stock.

You sell a call option at a higher strike price.

You earn the premium upfront.

If price stays below strike, you keep the premium + your shares.

When to use

You expect slow gains, not a big rally.

You want regular income from your holdings.

Risk and reward

Risk: Stock price can fall (same as holding shares).

Reward: Premium income + small upside until strike.

Example

You own 100 shares of TCS at ₹3,800.
You sell a ₹3,900 call for a premium of ₹20.
If the stock stays below ₹3,900, you keep ₹2,000 premium.