Selling Deep In The Money Calls

Selling deep in the money calls is a great way for investors to generate recurring monthly income. Because of their relative safety (i.e. large amount of intrinsic value), deep in the money calls are one of the most popular kinds of covered calls to sell.

What does "selling deep in the money" mean?

The relationship between the strike price of the call option and the stock's current price is called "moneyness". If the strike price is at least a couple of strikes in the money (i.e. below the current stock price) then it is considered deep "in the money". Investors who buy stock for the purpose of selling deep in the money calls against it are trying to earn the time premium portion of the option price as income.

Deep in the money covered calls have a lot of intrinsic value (downside protection). The stock could drop after you've done a buy-write and you could still make money on the position. All you need is for the stock to stay above the strike price by expiration day and you will realize the full profit (time premium) on the trade.

Born To Sell's Search feature quickly finds deep in the money opportunities to sell that match your personalized investment criteria. It's easy to use, with simple sliders to set filter values.

This video demonstrates looking for deep in the money calls (turn your sound on and this will be more meaningful):

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Born To Sell is dedicated to having the best covered call screener available. In addition the screener, we have several portfolio management tools designed to help you maximize your monthly income from selling options.