Hey Traders,
It’s Tuesday — and I’ve got good news.
This market’s starting to turn bullish again. It’s not just one sector either — we’re seeing signs of strength across the board.
And in times like this, one strategy really shines: covered calls.
Covered calls are a way to generate income from stocks you already own.
When the conditions are right, this strategy can feel like printing your own paycheck — especially in a market like the one we’re in now.
Let me break it down…
Why Covered Calls Work Best Right Now
There’s been a flood of call buying lately. And that means option premiums are juiced — perfect conditions for selling calls.
But not every stock makes a good candidate.
If you want to run the covered call strategy right, your stock has to have two key traits:
- Directional bias — meaning it’s trending higher.
- Volatility — meaning option prices are elevated.
That second one trips up a lot of folks. But it’s easy to measure using something called beta.
A stock with a beta over 1 is more volatile than the broad market. That’s what we want — because more volatility = more premium to collect.
The Trickiest Part? Buying the Shares
The biggest barrier to entry for a covered call is the stock itself.
You need to own at least 100 shares of a stock to sell one call.
If it’s a $250 stock? That’s a big commitment. ($250 x 100 = $25,000)
But when a stock is under $100? Now we’re talking.
So here are two I’m using right now:
- HOOD (Robinhood) – Just over $60/share, great trend, and solid beta.
- IBIT (iShares Bitcoin ETF) – This one is about $60/share and looking strong, with solid upside energy.
Even if you’re not ready to buy 100 shares, they’re worth watching for a quick trade. But if you are ready, these are excellent setups for covered calls.
How to Structure the Trade
Let’s say you bought 100 shares.
Here’s how to turn that into cash flow:
- Strike Selection: Pick a strike price about 10% higher than where you bought the stock. That way, if you get assigned, you lock in a 10% gain plus the premium you collected.
- Expiration Date: Go out 30–40 days. This gives you enough time for the trade to work while keeping it short enough to roll regularly.
You can do this 11 or 12 times a year.
And if you set it up right?
That’s cash flow heaven, baby.
Trade well,
Jack Carter
P.S. Here’s another solid way to play this market.
