I do not know what covered calls are I only know how to buy and sell options I just need example and instructions on how to set them up . I use charles schwab for my trading platform.

If you're new to options trading and want to learn about covered calls, here's a beginner's guide to setting up covered calls on Charles Schwab:

1. Understanding Covered Calls: A covered call is an options strategy where you sell a call option on a stock you already own. This allows you to generate income from your stock and provides some downside protection if the stock price falls.
2. Steps to Set Up a Covered Call on Charles Schwab:
   • Owning the Stock: Before setting up a covered call, you must own the stock for which you want to sell the call option. If you don't own the stock, you cannot set up a covered call.
   • Selecting the Options: Navigate to the options trading section on Charles Schwab's platform. Choose the stock you want to trade, and then select the call option you want to sell.
   • Selling the Options: Fill in the order details, including the number of shares you want to sell and the strike price you set. The strike price should be above the current market price of the stock. Review and confirm the order details before submitting the trade.
3. Example of a Covered Call:
   • Situation: You own 100 shares of XYZ stock at a cost basis of $50 per share. You believe the stock will not appreciate significantly in the near term and decide to sell a covered call to generate income.
   • Parameters:
     • Stock: 100 shares of XYZ
     • Strike Price: $55 per share (above the current market price)
     • Number of Contracts: 1
   • Calculation:
     • Premium Received: $5.50 (assuming XYZ is trading at $53 per share)
     • Potential Loss: Limited to the premium received if the stock price remains below the strike price.
     • Potential Profit: $5.50 if the stock price falls to $50 (your breakeven point), plus the premium received if the stock price rises above the strike price.
4. Managing the Covered Call:
   • Monitoring: Track the price of the stock and the options market regularly to ensure the trade is performing as expected.
   • Adjustments: If necessary, you can close the options trade early or sell a different options contract to adjust your position.

By following these steps, you can set up a covered call on Charles Schwab. Remember, options trading involves risk, so ensure you understand the associated risks and have a strategy in place before initiating a trade.