A covered call option is a two part transaction where a stock is purchased, or owned, and call options are sold on a share-for-share basis.  A call option means you enter into a contract to sell you shares at a agreed price, that you are happy with, sometime in the future...often about a month's time.  You get paid, a Premium, for selling (writing) the contract.

An option is a promise.  A promise that is made via a contract and upheld by the law...and usually some security, like company shares. 

  • An option is a contract giving the buyer the right, but not the obligation, to buy shares at an agreed price on or before a certain date. People use options for income (selling covered calls), hedge risk and/or speculating on share price movement.
  • Options are known as derivatives because they derive their value from an underlying asset.  A stock option contract usually represents 100 shares, in Australia, of the underlying stock.

I might give [sell] you the option to buy my shares at a future date and promise that if you do decide to buy them, I will sell them to you: at the price and under the conditions we agreed.  You would pay me a Premium to buy the contract.  This is how I make income from selling a covered call option contract.

That was easy!

Options are bought and sold electronically, and the contract is also virtual, that is electronic; somewhere in cyber space.

You can buy shares on the Australian Stock Exchange (ASX)… also known as the stock market.  You can also buy an "option" from someone else, who already owns shares, to buy their shares later on; if you choose to.  For example, if the share price goes up and you have an option contract to buy them at a cheaper price then, you would most likely buy the shares at the cheaper price and then sell them back to the market, at the current higher price, and make a profit.

Also, if you own shares, then you can sell an option to someone else.  You get paid for selling the option now and always keep this “Premium”.  The “Buyer” might then buy your shares from you later on, if the price goes up.   You're ok with this, in fact you are delighted with this because you are happy to sell the shares at the price you agreed in the contract and because the money you get for selling the option contract, which you have already been paid, may well be 2% to 3% of the value of the shares you bought in the first place; and the option contract period may only be a month!  2% to 3% return in a month is not bad.  First caution but; you are not likely to sell an option contract on the same shares consistently every month, however, you may regularly sell (write) call options over shares you own, or buy, (covered calls).

covered call option is a financial market transaction, enforced by a contract, in which the seller of the call option owns shares or other securities, covering the value of the contract.  If you buy the shares at the same time as you sell the call option then the strategy is often called a "buy-write" strategy.

Owning the underlying shares is said to provide the "cover" as the shares can be delivered to the buyer of the call option if the buyer decides to 'exercise' the contract.

Writing a call option generates income from the “Premium” paid by the call option buyer.


You can learn more by watching the videos in the Beginners Guide page


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I find the most challenging part of trading covered calls is understanding the process which has little to do with investment decisions.  The data shows us that if you buy shares and write (sell) and option over those shares you will be paid a premium, and often this can represent a very good annualised return.

The shares you buy and the options you write are your decision.  However, My Covered Calls and ProWriter software presents you with factual data which you may use to help you decide, and plan your option trades.  Very important.

This factual information is presented in an easy to read report so you can see the Yield, check the Trend and write a Trading Plan.

But how do you go about buying shares, placing an order, writing an option contract and a bunch of other stuff.

You can contact me, Tony on 0408763663 and I am happy tell my story about setting up accounts, getting an online broker, how to place an options trade etc.  And you can also speak openly with an experience options Adviser from a reputable broking firm. They could set you up with an account and offer financial advice.  This is often a good way to start...use My Covered Calls and ProWriter to plan your trades and then speak with your Adviser who can add financial advice and place trades for shares and options, and do buy-writes.

Here at My Covered Calls what I offer is a great data service which displays all the information you may need to write a wining Trading Plan, however, if you need help with understanding something like ACH fees or weather to buy to "open" or buy to "close" then I am also happy to help you on the technical side of things.  Please call anytime

Our Mission is to Provide People with Timely Relevant Covered Call Option Data

You Tube Covered Call Option Tutorial:


ProWriter Connection Issues - Technical Notes

If ProWriter does not readily connect one time and you get an error message that says cannot connect to the internet, and you are connected to the internet, then please check your DNS, as it may be blocking the web site at the server.

Changing the local DNS to google’s public address could sort it out! See

This issue has cropped up only a few times over the last 11 years and has mostly occurred when Users are connecting through a server at their work or some other larger network like in a hotel. 
Should you have a problem with ProWriter then please use the smart reports in the Member's which provide the same data that you can manually put into a Trading Plan.  You can download a Trading Plan template from the Toolbox Calculator.  

PS I am retired now, but still relatively young, and my wife and I are spending time travelling outback experience; so if phone goes to message please be patient and I will get back to you when I can :-)



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