What Is a Good Strike Price for Covered Calls?

A good strike price is typically 5–10% above your cost basis if you're aiming for a balance between premium income and potential upside.

If you're aggressively seeking premium, you may sell closer to-the-money (ATM). If you're more bullish on the stock, selling farther out-of-the-money (OTM) gives more room for gains.

Using a calculator helps you visualize these tradeoffs before committing to a strike.

📊 Example Trade

TSLA @ $368
Strike: $380
Premium: $12.10
DTE: 30

👉 Try this covered call in the calculator → https://bit.ly/tsla-call

Tips

• Check implied volatility before selecting a strike

• Avoid earnings week if you're unsure about stock movement

• Track ROI across different strike distances

🙋‍♂️ FAQ

Q: Should I always pick a strike above my cost basis?
A: Generally yes — to avoid locking in a loss on assignment. But some traders sell ITM for higher premiums.

Q: How far out should I go in days?
A: Most retail traders sell 30–45 DTE options for a good balance of premium and time decay.

Q: What if my stock falls below my cost basis?
A: Your call premium softens the loss, but you may need to hold or roll the trade forward.