If you own stocks and you're not selling covered calls, you're leaving money on the table. A covered call means you own 100 shares of a stock and sell a call option against those shares. You collect the premium immediately, and in exchange you agree to sell your shares at the strike price if the stock reaches it by expiration. It's like renting out a property you own — you still hold the asset but you're generating income while you wait. This is one of the most conservative options strategies that exists, and institutions use it to quietly stack income on positions they already hold.

Cash-secured puts are the flip side. Instead of owning shares and selling calls, you set aside cash and sell a put option on a stock you WANT to own. If the stock drops to your strike price, you buy the shares at that price — which you already decided you were cool with. If it doesn't drop, you keep the premium free and clear. Think of it like putting in a lowball offer on a house and getting paid to wait. The 'cash-secured' part means you have the funds in your account to buy the shares if assigned — no margin games.

The income math is real. Own 100 shares of a $50 stock and sell a monthly covered call at the $55 strike for $1.50 per share — that's $150 in premium every month. Over a year, that's $1,800 in extra income on a $5,000 position — a 36% yield just from selling calls. Even hitting eight months out of twelve, you're generating 25%+ annual returns on top of any stock appreciation. This is how the wealthy generate passive income from their portfolios while everyone else just watches their positions sit there.

The trade-offs are straightforward. With covered calls, your risk is the stock rockets past your strike and you miss out on big gains — you sold those gains for premium. With cash-secured puts, the risk is the stock crashes below your strike and you're buying at a price above market value. Manage this by selling calls at strikes you'd genuinely be happy selling at, and selling puts at prices you'd genuinely be happy buying at. Never sell options at strikes that would make you sick if they got hit.