Covered calls are an incredible options trading strategy.
Why?
Because the seller of the option profits from the decay in time value.
For those of you who geek out on the greeks…Theta is the Option Greek for time decay.
This gets a little complicated… but in a nutshell, as the option approaches expiration, the intrinsic value starts to fall rapidly.
Check out this article that explains the details – and has a great graph.
That’s why I think covered calls are the easiest way to collect cash… Fast!