Do you make more money with OTM calls?

If the underlying stock does move in the anticipated direction, and the OTM option eventually becomes an in-the-money option, its price will increase much more on a percentage basis than if the trader bought an ITM option at the onset.

What is the maximum one can lose and earn by buying this call option?

The maximum loss on a covered call strategy is limited to the price paid for the asset, minus the option premium received. The maximum profit on a covered call strategy is limited to the strike price of the short call option, less the purchase price of the underlying stock, plus the premium received.

How much money can I make selling covered calls?

In general, you can earn anywhere between 1 and 5\% (or more) selling covered calls. How much you earn depends on how volatile the stock market currently is, the strike price, and the expiration date. In general, the more volatile the markets are, the higher the monthly income you’ll earn from selling covered calls.

Can you make money buying and selling call options?

The call owner can exercise the option, putting up cash to buy the stock at the strike price. Or the owner can simply sell the option at its fair market value to another buyer before it expires. A call owner profits when the premium paid is less than the difference between the stock price and the strike price.

Can you sell an OTM option?

There are two ways you can profit by trading OTM options: 1. Selling the OTM call/put options which will give you the premium and if the market does go in your direction you get to keep the premium entirely but you will have to shell out higher margins to take such a position also there is a risk of unlimited loss.

How do I make the most money selling covered calls?

A covered call is therefore most profitable if the stock moves up to the strike price, generating profit from the long stock position, while the call that was sold expires worthless, allowing the call writer to collect the entire premium from its sale.