Generating Income Through Selling Covered Calls

Open an account with the ability to trade options. My suggestion would be Interactive Brokers. I like their low commissions - $1 for stock trades and $0.75 per option contract trade. Start by buying at least 100 shares of a company. The idea is to sell a call option at a premium to generate extra income on the stock. Screen the available call options. Selling a call option allows the buyer to buy your 100 stocks at a set price. The price of the call option is the difference of the current stock price and the call option strike price along with a premium. Try to find a call option that will expire in one month. At the end of the month, if the call option strike price is above the stock price, then you keep the stock and the premium received from the sale of the call option. If the stock price is above the call option strike price, you sell the stock at the stated price for the option, and keep the money from selling the call option.