RE:RE:RE:RE:RE:Smart investing Covered calls are in fact not speculating but a conservative way of increasing one's income. Noth8ng goes to zero, you are selling the right to buy your shares at a future time at a specific price. The buyer goes to zero if the option is not excercised .
example
today
tou buy at 79.33
sell nov 18 call at 81.75 for 1.25
so, nov 18 if share price is 81.75 or above you are selling your 79.33 shares at 81.75 , and keep the 1.25 as a premium. Net is selling at 83.00
if shares are below 81.75 you keep the 1.25 premium
Also as the time value decreases as we reach nov 18 the premium goes down and you can buy back the option and close it.And write another further out.
example
if by nov 17 the shares are 80.50 the call option you sold for 1.25 would be worth maybe .25 , then you could buy back and close position, net 1.00 and write another one out the next week.
I have been doing the above for about 6/12 now and have been called once. Kept all the premiums .I avoid call dates near earning announcements, as if really good or the announcements of special dividends pop the price.
I own 1000 share of tou so the premiums add up.
1,000