Weekly Options with Covered Calls - a Winning Combinations

Weekly Options with Covered Calls – a Winning Combinations

Selling Covered Calls with Weekly Options: A Low-Risk Income Strategy  

Weekly options allow traders to sell covered calls at a much faster rate than traditional monthly contracts. By utilizing this accelerated time frame, covered call writers can potentially generate significant income over the course of a month.  

For those unfamiliar, a covered call involves selling call options against shares of a stock already held long in your portfolio. This caps upside potential in exchange for immediate premium income received.  

Weekly covered calls work in the same fashion but present more opportunities. You can sell calls each week against your stock holdings, aiming to collect premium on 3-4 contracts per month rather than just one.  

This compounds your income generation in a short period. Plus, the quicker time frame means calls decay faster due to theta, increasing your probability of profit.  

The downside is reduced time for your shares to be called away at a higher price. So focus on stocks expected to trade sideways within a tight range.  

Tech, consumer staples or blue chips tend to suit this strategy well. Watch for high implied volatility (IV) too, since that inflated premiums.  

Avoid attempts to time the market – always sell calls above your cost basis to limit risk. Close positions before expiration for maximum flexibility.  

By maintaining a portfolio of weekly covered call positions over time, traders can achieve consistent, lower-risk supplemental income from option premiums. The accelerated timeframe makes this an excellent strategy to consider.  




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