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Comment by hi_hello

Do you mean selling uncovered calls? With a covered call your potential profit is capped, but you aren't exposed to the infinite risk of buying the stock (since you already own it) at a bananas price if it exceeds your strike.

Selling covered calls can be a fine substitute for limit sells if used carefully. Assuming one is comfortable selling at the strike price, the covered call trickles a little profit in the meantime.

parent hi_hello 5 years ago

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