The Options Insider Radio Network Wide World of Options: Options for (Premium) Income: Unpacking Covered Calls & Cash-Secured Puts
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Feb 5, 2026 Dr. Alan Ellman, president of The Blue Collar Investor and options-income educator. He breaks down covered calls and cash-secured puts. Short, practical takes on strike selection, managing assignment risk, and aligning trades with return goals. Also covers using puts to enter positions and precautions around earnings and dividends.
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Cover Your Calls By Owning Shares
- Buy 100 shares first so your short call is fully "covered" and you know your cost basis before selling options.
- Sell weekly or monthly calls and set the strike and expiration to match your risk tolerance and goals.
Pick Strikes Based On Comfort And Market View
- Choose in-the-money calls for more downside protection and larger premiums, or out-of-the-money for upside participation.
- Decide ahead if you are willing to have shares assigned and pick strikes that match that comfort level.
Distinguish Time Value From Intrinsic Gain
- Premium from an in-the-money call includes intrinsic value that reduces effective share appreciation.
- Measure your real profit as time value plus realized share gain/loss versus your objective.