Covered Calls Explained With a $10 Stock #Shorts

Covered calls explained in plain English with a simple $10 stock example.

The big idea:
You already own 100 shares. You sell someone else a buy ticket on those shares. They pay you a premium.

Simple example:
- Stock price: $10
- Covered call strike: $12
- Premium: $1 per share
- One contract: 100 shares
- Premium collected: $100

If the stock stays below $12, the ticket is not useful to the buyer. You keep your shares and keep the $100 premium. If the stock jumps above $12, the buyer may use the ticket, and you may sell your shares at $12.

A covered call trades some upside for income. The stock can still fall.

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