The covered call is the simplest income strategy in options. You already own 100 shares; you sell someone else the right to buy them at a higher price for a month; you pocket the premium. The trick is not the concept — it is the rhythm: which delta, which DTE, and when to roll. This is the monthly playbook.
The One-Line Rule
For dividend / blue-chip names: sell a call 30-45 days to expiration (DTE) at delta ~0.30. Repeat monthly. That single rule captures ~80% of what the data says is optimal for income-focused covered calls.
30-45 DTETheta sweet spot
Enough time that premium is meaningful, short enough that theta has already started accelerating. Shorter DTEs generate thin income; longer DTEs tie up the stock without proportional premium.
0.30 deltaAssignment probability ~30%
OTM but not so far out that premium is insulting. 70% of the time the call expires worthless and you keep the premium + the stock. 30% of the time you get called away near your strike — not the worst outcome if you picked the strike.
MonthlyOne decision per cycle
At expiry, either let it expire worthless and sell the next month, or close + roll out if challenged. One calendar event per position. Low-touch.
The Monthly Flow
1
Check IV percentile on the underlying. If IVP < 30%, premium is thin — skip this month and wait. The covered call only pays when someone wants to pay up for options.
2
Pick a 30-45 DTE expiry. Select the strike closest to delta 0.30. Verify the strike is above your cost basis (you don't want to be forced to sell at a loss).
3
Sell the call. Collect premium. Done for the month.
4
At expiry: if the stock is below the strike, the call expires worthless — keep the premium, repeat. If above, either accept assignment (stock is called away at strike + premium) or close + roll to next month's 0.30 delta.
The covered call caps your upside at the strike. That is the cost of the premium. For true growth names you believe will double, this is wrong — do not run covered calls on your 10-bagger conviction bets. Run them on steady dividend payers where the upside is already modest.
What the App Helps With
The watchlist tags dividend / blue-chip names for you. The volatility page shows current IVP so you know whether premium is worth collecting this month. The risk dashboard surfaces ex-date warnings (selling calls into ex-date risks early assignment by the call buyer).
Rule: 30-45 DTE · 0.30 delta · monthly
Skip months where IVP < 30% · strike must be above cost basis
Not for your 10-bagger conviction names — for steady dividend payers
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