What Is a “Covered Call” Strategy and Is It Bearish?

A covered call is a popular options strategy where an investor sells a call option while simultaneously owning an equivalent amount of the underlying stock. It is not a bearish strategy; rather, it is considered neutral to slightly bullish.

The goal is to generate income from the option premium. The investor profits if the stock price stays relatively stable or rises slightly, but caps their upside potential beyond the option's strike price.

The "covered" aspect means the obligation to sell the stock is covered by the shares they already own, making it much less risky than a naked call.