Common wisdom is that return in a function of risk. But is that really true?
At the money covered call writing is a strategy in which an investor sells an option with a strike at the current price of the underlying security. In this strategy the maximum gain is the amount that is received from the premium.
In the money covered call writing is a strategy in which an investor sells an option with a strike that is lower than the current price of the security. The further in the money the more conservative the strategy is, however, upside is decreased accordingly.
Out of the money covered call writing is a strategy in which an investor sells an option with a a strike higher than the current price of the security. This investor profits in the initial upside movement of the stock. The maximum gain is the premium plus the difference between the strike and the current value
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