Learn / Trade options with confidence
Selling a covered call
How do I earn premium on shares I already hold?
Video coming soon
In this lesson
- You sell the right to buy your shares. One contract covers 100 shares you already own. You get a premium for it right away.
- The premium is yours however it turns out. Rendity books it with the stock you sold the call on and counts it in the total return.
- If the price stays below the strike, the call expires. You keep the shares and the premium and can sell a new call.
- If the price rises above the strike, your shares are assigned. You sell at the strike. Whatever the price gains above it does not go to you.
The example: calls on Apple and Keurig
You hold 200 Apple shares. One call is open: strike $380, expiring 18 December, $420 in premium. One contract is 100 shares, so Rendity shows 100 shares as reserved and 100 as free.
If the buyer exercises, the shares are already in the account. That is what covered means. Before this one you sold three calls on Apple, for $145, $240 and $310 in premium. All three expired, and the shares stayed.
With Keurig the strike of $30 is above the average cost of $27.83. In June 2026 Keurig rises above $30, and the shares are sold at $30. That is still a gain. Anything the price gains above $30 does not go to you, and the premium is what you were paid for it.
Now imagine the opposite. You bought shares at $68, the price falls to $45, and you sell calls at $45. When the shares are called away, you have lost about $5,000 on 200 shares. That is why it helps to look at your cost-basis line before you sell a call.
Sample account, not real data, not investment advice.
Where to find it in Rendity
On the Dashboard, in the Options Planner, each stock shows how many calls are open. Expand a row to see the strike, the expiry and the reserved shares. On a stock's position page, the Option Premium sits in the bar at the top, next to dividends and realized gain.
Included inSprout Tree Orchard
Terms from this lesson
Education only, not investment advice. Tax topics are not tax advice.