Personal Finance
How do covered calls work?
Quick Answer
A covered call sells a call option against 100 shares you already own, collecting an upfront premium (typically 1–3% of stock value per month). You keep the premium plus dividends but cap upside at the strike price.
Warren Team
Updated April 26, 2026
34
Warren Team
Updated April 26, 2026
34
Important Disclaimer:
The information provided is for educational purposes only and should not be considered as personalized financial advice. Warren is a registered investment advisor. Past performance does not guarantee future results. Please consult with a qualified financial advisor before making investment decisions.
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