New to covered calls — looking for advice on generating income from my current portfolio
Hey everyone,
I’ve been reading up on covered calls and trying to learn by playing around with my own portfolio in OptionStrat before I actually start doing this for real. Would appreciate some input from people who’ve been doing this longer.
Here’s roughly what I’m holding right now:
- Micron (MU) – ~600 shares (this is my biggest position)
- Meta (META) – ~200 shares
- ZIM – ~2300 shares
- Smaller positions in Tesla (TSLA) and Alibaba (BABA)
My goal is pretty simple: I want to start generating some income from these using covered calls as considerable amount is locked into these long term investments. I’m okay selling calls on most/all of my shares, but I’d prefer not to lose my core positions too easily (especially MU and META).
What I’ve been trying so far:
For MU (~$455 right now), I was looking at weekly calls expiring this Friday. Something like the $520 strike (~14% OTM) looks interesting and premium seems decent (~$1.5–$2ish depending on timing).
I also tried splitting it up:
- some contracts at 520
- some further out like 550
Where I’m not really sure:
- How far OTM do you guys usually go for something like MU? Is ~10–15% reasonable or too conservative?
- Do most people sell calls on all their shares or keep some uncovered?
- Weekly vs monthly: is weekly worth the extra effort?
- When do you usually roll? As it gets close to the strike or based on % profit?
- IV is pretty high on MU right now (~60%+): good time to sell calls or also higher risk of getting blown through?
My main concern isn’t downside (I’m holding these long-term anyway). It’s more:
- stock ripping higher and I capped it too early
- getting assigned and then watching it keep running
Curious how you’d approach this if your goal was steady income but still keeping upside.
Appreciate any thoughts 🙏