Apple (AAPL) and Amazon (AMZN) are two of my core holdings right now, but I’m not just sitting on shares and hoping. I’m focused on income — layering in ratio spreads, selling premium and rolling covered calls for steady returns while I manage risk.
Apple: Rolling for Dollars
I’ve got 400 shares of Apple, and I’m making them work. I’ve stacked multiple ratio spreads, some of which are already pushing 50% returns. If they stretch to 75% or 80%, I’ll take the win and move on.
At the same time, I’ve got a covered call out to July at the $175 strike. If Apple ranges between 170 and 190, I can just keep rolling that out every 30 to 45 days and pull in a few hundred bucks each time. It’s not flashy, but it’s reliable income on a stock that still looks resilient.
Amazon: Protect the Position, Juice the Premium
Amazon’s been choppier, but I still like it long term. I’m holding some shares and selling covered calls out to August at $225. If I get called away, I’m looking at about $20,000 in profit. If not, I’ll roll the strike down, keep collecting premium, and ride out the noise.
I’ve also been running ratio spreads and added puts for downside protection. Around the 150 level, I’m watching closely — if it holds, I’ll keep building. If it breaks, I’ve got the hedges to catch the fall.
Every trade I’ve put on here is about consistency. This market is noisy, unpredictable and full of traps. But income is controllable — and that’s what I’m after.
Here’s a step-by-step walkthrough on how to sell a covered call the right way…
How to Sell a Covered Call: A Step-by-Step Walkthrough
Selling a covered call is one of the most straightforward ways to generate income on stocks you already own. Here’s how I do it — no fluff, just steps that actually matter.
1. Own at Least 100 Shares
This is non-negotiable. A single options contract covers 100 shares, so if you want to sell a covered call, you’ve got to own 100 shares of the stock first. If you don’t, this is not the strategy for you — at least not yet.
2. Pick a Strike Price Above Your Cost Basis
I’m always looking to sell a call at a strike price I’d be happy to sell my shares at. Ideally, it’s above my cost basis and close to a recent resistance level. That way, I either pocket the premium or get called away for a profit. Win-win.
3. Choose an Expiration Date
You can go weekly, monthly or longer — it depends on your risk tolerance and income goals. I usually stick with expirations 30 to 45 days out. That gives the trade enough time to work but still lets me adjust often.
4. Check the Premium
Pull up the option chain and look at the premium you’d collect for selling that strike. I want enough premium to make it worth the trade — typically at least 1% of the stock price per month, but more is better if I’m further out-of-the-money.
5. Place the Trade
In your broker platform, go to the option chain, select the strike and expiration you want, and choose “Sell to Open” one call contract. Make sure it’s a call, not a put. Confirm the order, send it, and boom — you’ve sold a covered call.
6. Manage It Like a Pro
From here, you’ve got two outcomes:
- If the stock stays below the strike, you keep the shares and the premium — rinse and repeat.
- If it climbs above the strike, your shares get called away. You still keep the premium and you sell your stock at a price you were happy with. Not a bad problem.
You can always roll the call to a later expiration or a higher strike if you want to stay in the position and keep generating income. Just don’t let it get away from you — this strategy works best when you’re actively managing it.
That’s it. Covered calls aren’t glamorous, but they’re consistent — and that’s what builds accounts over time.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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