NEW YORK (TheStreet) -- I wrote an article for TheStreet on Tuesday detailing how investors can make sensible options trades to maximize the income out of dividend-paying and non-dividend-paying stocks. I acknowledged one of the major risks associated with writing covered calls was losing your shares.When you write a covered call, you sell one call option for every 100 shares of a stock that you own. You can also execute a buy-write to establish a covered call. This simply means you open the long stock and short option leg of the trade at the same time in one transaction. In either case, you collect the premium, as a credit to your account, of the call you opted to sell. You keep that income no matter what happens. If the price of the stock moves past the strike price of the call you sold, you could have your shares called away by the party that is long the call you are short.
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