Quick definition
An options strategy where you sell a call option against 100 shares of stock you already own, collecting premium income while capping upside potential.
Mechanics
Own 100 shares of XYZ at $100. Sell a 30-day $105 call for $2.00 of premium. Three outcomes: stock stays below $105 (you keep the $200 premium and the shares), stock finishes between $105 and $107 (premium plus capped appreciation), or stock rallies past $107 (you've capped your upside and forfeited gains above $105 in exchange for the original premium).
Why it works
Most stocks trend sideways or modestly upward most of the time. A covered-call writer monetizes that base rate. The strategy underperforms during strong rallies and offers only modest downside protection (one strike's worth of premium), so it suits a long-term holder who values income over participation in tail outcomes.
How Treeova uses it
Covered-call agents on Treeova auto-roll when the short call goes deep ITM (typically at the 0.80 delta threshold) and auto-close at 50% max profit. The Wheel strategy extends this — assignment on a cash-secured put rotates into stock, which then funds a covered call, and so on. Position-level delta and theta are visible in the Workspace so the trader can see exactly what they're being paid for.