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+Covered Call
+The problem with selling a naked call is that it has unlimited exposure to
+upside risk. Because of this, many traders simply avoid trading naked calls.
+A more common, and some would argue safer, method of selling calls is to
+sell them covered.
+A covered call is when calls are sold and stock is purchased on a share-
+for-share basis to cover the unlimited upside risk of the call. For each call
+that is sold, 100 shares of the underlying security are bought. Because of the
+addition of stock to this strategy, covered calls are traded with a different
+motivation than naked calls.
+There are clearly many similarities between these two strategies. The
+main goal for both is to harvest the premium of the call. The theta for the
+call is the same with or without the stock component. The gamma and vega
+for the two strategies are the same as well. The only difference is the stock.
+When stock is added to an option position, the net delta of the position is
+the only thing affected. Stock has a delta of one, and all its other greeks are
+zero.
+The pivotal point for both positions is the strike price. That’s the point the
+trader wants the stock to be above or below at expiration. With the naked
+call, the maximum payout is reaped if the stock is below the strike at
+expiration, and there is unlimited risk above the strike. With the covered
+call, the maximum payout is reaped if the stock is above the strike at
+expiration. If the stock is below the strike at expiration, the risk is
+substantial—the stock can potentially go to zero.
+Putting It on
+There are a few important considerations with the covered call, both when
+putting on, or entering, the position and when taking off, or exiting, the
+trade. The risk/reward implications of implied volatility are important in the
+trade-planning process. Do I want to get paid more to assume more
+potential risk? More speculative traders like the higher premiums. More
+conservative (investment-oriented) covered-call sellers like the low implied
+risk of low-IV calls. Ultimately, a main focus of a covered call is the option