Oh, covered calls! How I love you so!
These nifty little option trades generate income for me when stocks I own are stagnant, and that always has been the primary reason I love covered calls. If some blue-chip stock is just sitting around, I can sell covered calls against all or part of my position and earn some income.
The thing about blue chips is they don’t often move very much or very quickly, except around earnings. So, I like to balance that out by selling against a position in a small-cap or midcap growth stock. These tend to be more volatile and offer greater premiums. I might miss out on some upside, but volatile growth stocks tend to gyrate enough that I can buy back in around the same price the stock got called away at.