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How much does it cost to write a covered call

The actual cost of buying a stock and writing a covered call depends on the price of the stock and the option.
You must own at least 100 shares of a stock before you can sell 1 call contract against it. 1 contract applies to 100 shares of stock.

So if the stock is $5, it will cost you $5x100 = $500 to purchase the stock. You can then sell 1 contract for each 100 shares.


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