If you already own shares then arguably your risk does not change if you write an option over those shares.
If you are concerned that you will be exercised (and may not wish to because of capital gains etc) you could "roll" the option forward into a new contract and your shares are not sold.
The Buy Write is an options investment strategy in which an investor buys shares and writes a call option contract over an equivalent number of shares. If the shares are already held from a previous purchase, it is often referred to as covered call writing. Buy-Write is the most basic and widely used options investment strategy, combining the flexibility of listed options with share ownership
The strategy of buying shares and writing options is eligible within Self Managed Superannuation Funds (SMSFs), provided it is allowed for in the Fund’s investment strategy
History tells us that writing covered calls over shares that you hold out performs just holding shares alone.
If you already own shares then arguably your risk does not change if you write an option over those shares. Only two outcomes can happen:
The covered call option contract expires worthless and you retain the shares, or
The contract is exercised and the shares are sold for the price agreed in the contract.
My Covered Calls and ProWriter software shows you which options have the best returns. Other information in the reports includes:
The above information is regularly updated in the reports during market hours. The reports are accessible 24/7The information is used to develop a trading plan showing you the outcomes of every option trade
Why Use My Covered Calls?
ASX Buy-Write Fact Sheet See http://www.asx.com.au/documents/resources/buy_write.pdf
ASX Understanding Option Trading http://www.asx.com.au/documents/resources/UnderstandingOptions.pdf