Stock + Covered Calls — explained simply

How our strategy works

We use AI signals to buy the right stocks, then sell covered calls on every position to collect extra income every 30 days. No guesswork, no complicated setups.

Two income streams. One strategy.

Most traders rely on a stock going up to make money. Our strategy earns two ways simultaneously — price appreciation and option premium, regardless of whether the market is trending or choppy.

📈

Layer 1 — Stock gains

Our AI screens 100+ stocks daily and scores them 0–100 across technical, fundamental, and momentum factors. We only buy when a stock scores 60+, hold up to 30 days, and exit at a 12% gain or 8% stop-loss.

💰

Layer 2 — Option premium

While holding each stock, we sell a covered call — collecting cash upfront. This income lands in the account immediately, every 30 days, on every position. Over 4.8 years this added $55,972 in premium income on top of stock gains.

What's a covered call?

Beginner-friendly

A covered call is a simple agreement where you, as the stock owner, sell someone else the option to buy your shares at a set price by a set date — in exchange for cash paid to you right now. You don't need to do anything fancy. Here's how it plays out:

Example: NVDA positionScore 72 · BUY signal
①
Signal fires. You buy 100 shares of NVDA at $500/share ($50,000 position).
②
Sell a covered call. You sell a 30-day call option with a $550 strike price (10% above current price). The buyer pays you $300 in premium — immediately.
③
30 days pass. One of two things happens:
✅
Stock stays below $550
The option expires worthless. The buyer walks away. You keep your 100 shares and the $300 premium. Sell another call next month and repeat.
📤
Stock rises above $550
Shares are "called away" — sold at $550. You earn $50/share in stock gain ($5,000) plus the $300 premium. Total: $5,300 profit on a $50k position.
Key insight: Either way, you profit. The premium is yours to keep no matter what the stock does. The only downside is missing out on gains above $550 — but that's a trade-off you choose to make.
$550
Strike price
10% above entry ($500)
$300
Premium collected
Cash in hand immediately
$497
Break-even downside
Stock can drop 0.6% and you still profit

How a trade unfolds, step by step

From signal to exit, here's exactly what happens on every position we run.

1

AI signal fires

The scoring engine scans 100+ large-cap stocks each week and identifies ones scoring 60 or above. Higher scores mean more factors are aligned — trend, momentum, volume, and fundamentals. Only the top-ranked stocks get a position.
2

Stock position opened

A position is sized as roughly 1/15th of the portfolio (15 max concurrent positions). Stop-loss is set at −8% below entry; take-profit at +12% above entry. Max hold time: 30 days.
3

Covered call sold immediately

As soon as a stock is held, a 30-day covered call is sold at 10% above the current price — but only if the premium is at least 2% of the stock price. This quality filter prevents selling calls for pennies on low-volatility names.
4

Premium lands in account

The option premium hits the account the same day. This cash is yours regardless of what happens next. It lowers your effective cost basis and cushions any downside.
5

Position closes (one of three ways)

  • → Take profit: stock hits +12% — sell shares, keep premium.
  • → Stop loss: stock drops −8% — sell shares, premium partially offsets loss.
  • → Called away: stock rises past the strike and the option is exercised — shares sold at strike price, premium kept.
6

Repeat

Capital is recycled into the next signal. The cycle repeats weekly as new signals are generated and positions rotate.

Strategy flow

🔍
Signal fires
Score ≥ 60
→
📦
Buy stock
1/15 portfolio
→
💰
Sell call
10% OTM · 30 DTE
→
⏱️
Hold ≤ 30 days
+12% / −8% exits
→
🔄
Exit & repeat
Recycle capital
Premium income: collected at step 3, kept regardless of outcome
Risk management: stop-loss at −8% limits worst-case loss per trade
Consistency: 15 simultaneous positions diversify single-stock risk

What this produced over 4.8 years

+198.76%
Total return
Jun 2021 – Apr 2026
+25.42%/yr
Annualized
vs SPY +11.05%/yr
$55,972
Premium collected
154 covered calls
+88.49%
Stock-only baseline
Premium adds +110k on top

The premium income alone added $110,270 in final portfolio value compared to running the stock strategy without options — turning a $188k result into $298k.

Is this strategy right for you?

Good fit if you…

✓ Already own or plan to own individual stocks
✓ Want consistent income beyond price appreciation
✓ Are comfortable holding a stock for up to 30 days
✓ Understand you may occasionally sell shares earlier than planned
✓ Have a brokerage account that allows covered calls (most do)

Not ideal if you…

✕ Need to liquidate positions on short notice
✕ Want to hold a stock indefinitely without any exit
✕ Are looking for a guaranteed fixed return
✕ Are not approved for options trading at your broker
✕ Prefer a fully passive, set-and-forget approach

Risks to understand

Capped upside
When you sell a covered call, you agree to sell your shares at the strike price. If the stock rallies far above the strike, you miss those extra gains. The premium you collected is the trade-off.
Stock can still fall
Covered calls provide a small cushion (the premium), but they do not protect against large drops. A −20% move on a stock still hurts, even after collecting 2% in premium. The 8% stop-loss is your primary protection.
Premiums vary by market conditions
When volatility is low, option premiums shrink. Some stocks won't meet our 2% minimum premium threshold and won't have a call sold on them that month. The backtest reflects realistic historical volatility — future premiums may differ.
Options approval required
Most brokers require you to apply for Level 1 options approval to sell covered calls. The process is simple — typically a short questionnaire about your experience — but it is a required step.

See the verified results

4.8 years of backtest data — every trade, every premium collected, every exit. No simulations hidden behind a paywall.

View Track RecordStart Free — 10 Signals/Day
Disclaimer: The strategy described is educational in nature. Backtest results are hypothetical and based on historical data using Black-Scholes pricing for option premiums — actual premiums vary based on implied volatility, liquidity, and market conditions. Results do not account for commissions, bid-ask spreads, taxes, or assignment costs. Options trading involves substantial risk and is not appropriate for all investors. You can lose money. Past performance does not guarantee future results. Not financial advice. Always consult a qualified financial advisor before trading.