If you own at least 100 shares of a stock, you can purchase a covered call to reduce downside risk. Also, by writing a covered call (selling it) you will receive a premium which is an immediate addition to your brokerage account.
Tax treatment differs based on whether the call is exercised or not. You will find that there is limited upside with a covered call however, if the stock continues to appreciate past the exercise price.
Tax treatment differs based on whether the call is exercised or not. You will find that there is limited upside with a covered call however, if the stock continues to appreciate past the exercise price.
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