"Curiously, the most attractive option strategy when returns are concerned in relation to risk is covered call writing. It provided profits over 20% a year with relative consistency and it is only about half as risky as holding a portfolio of common stocks."
Writing covered calls means selling a person the right to buy your stock at a certain price (exercise or strike price), within a certain time period (expiration cycle). When you sell (write) an option on stock you already own, the option is "covered" by the stock you own; therefore it is referred to as a covered call option. The money you receive is additional cash you would not have had if you just bought the stock and did not sell an option. Today many people are becoming more and more concerned about their cash flow. The whole idea behind selling covered calls is to increase cash flow in a conservative manner. This concept is especially appealing to those investors who want to get as big a return as possible from their capital.