Covered Call Screener | How to Maximize Returns Weekly

Are you looking to maximize your weekly returns through a covered call screener? Look n further! Our covered call screener will help you identify the best opportunities each week. We'll show you how to find high-yield stocks with upside potential and limited down ide risk. So what are you waiting for? Get started today!

Covered Call Screener | How to Maximize Returns Weekly

What is a Covered Call?

A covered call is an options strategy that involves both stocks and options. The trader buys the underlying stock and sells call options on the same stock. If the covered call expires in the money, the trader will lose their stock and keep the option premium. This might sound not good, but typically the stock is sold for a profit!

Why Use Covered Calls?

A covered call strategy is a great way to generate income on stocks that t you already own. This allows investors to utilize options with minimal risk. You can collect premiums and provide downside protection while holding the stock by selling call options. In addition, covered calls can help you lock in profits on stocks that have reached your target price.

Why Maximize Covered Calls?

The returns of covered calls vary mainly due to implied volatility. The difference in IV can lead to massive differences in the returns from the covered call. Most investors play covered calls safely by only using them on stocks they already own safe stocks that o er dividends. For example, on average covered calls on AAPL can return around 0.5-2% every month.

While this can be an exciting new income stream, stocks are found on a covered call screener with 3-10% returns in the next five days. The only downside is the stock price tends o be very volatile. Therefore, using a covered call screener to maximize returns is not for the faint heart.

In the example below, we will use a $1,000 account and show the power of maximizing covered calls.

  • One year - One Covered Call with a 1% Return would yield an income potential of $10.00
  • One year - Monthly Covered Calls with a 1% Return would yield $120.00
  • One year - Weekly Covered Call with a 1% Return would yield $520.00
  • One year - Weekly Covered Call with a 5% Return would yield $2600.00

As you can see, the power of maximizing covered calls can be a massive difference-maker for many portfolios. In some cases, this strategy could yield 100% if done correctly. However, finding these options returning can be pretty tricky, so it is essential to have a covered call screener. A covered call screener will save individual investors hours and maximize the markets weekly or monthly.

Please understand theories and returns are impossible to obtain effortlessly. Option trading involves risk. Covered calls have setbacks where they limit the investor's upside, force an early sale of stock, and cannot protect against the stock price falling consistently.

Best Covered Call Screener

If you g to this point in the article, there is a chance you are interested in maximizing this passive income vehicle but aren't sure what the best covered call screener is for stock and option trading.

The most popular covered call screener our traders, like to use can be found at BreadAlerts. BreadAlerts is an option seller's paradise providing the best option and spreads to sell. Many options traders also use this platform to follow large order flow and capitalize on movements from large institutions.

The screenshot below displays the stock and call combinations on the covered call screener. The screener also shows the most critical metrics for option sellers, which include:

  • Expiration Date: This is when the option will expire
  • Strike Price: This is an average s like price calculated for the given columns
  • Premium %: This is how much the option seller could return on their capital when selling an option
  • Premium % Per Day: Since these options expire weekly, this number is the return possible for the option seller every single day
  • Probability of OTM: This is the chance of the option expiring worthless
  • Toasty meter: This combines the probability of expiring worthless with the possible return. This measures risk to reward.

stock and call combinations on the covered call screener

Sorting for Covered Call Return on Capital

This covered call screener finds only options returning 3% every single week. If we sort the premium % column, the options with the highest premium can be shown. Please note that options that have options only have high premiums when they are volatile. Volatile stocks are typically the most dangerous to investors, so please be careful chasing yield.

With that being said, option sellers could event trade these covered calls to make 1-2% much quicker than some "safer" options.

Scanning for Probability of Expiring Worthless

Sorting for Probability of Expiring Worthless

In the example below, you can see by clicking the "Probability of Expiring Out of the Money," traders can quickly sort options most likely to expire worthless.

Probability of OTM

Problem with Chasing Option Premiums

Most option sellers can get too excited about our platform and start chasing high-yield options to sell. Unfortunately, this can be very dangerous because these are typically tied to a hazardous and volatile stock price and a poor company's financial health. Therefore, it is essential to note the chance the option expires out of the money. We refer to this on our platform as the chance of OTM (out of the money). This percentage is calculated for every option sold and gives us the theoretical possibility of profit. This formula is used by many brokers and helps traders know the risk beforehand.

The danger with high premium options is that chance of expiring worthless is relatively low. This means that traders can open themselves to a lot of risks. That is why it is essential to pay attention to that data point.

Problem with High Percent Chance of OTM

On the flip side, chasing option premiums with the highest chance of expiring worthless will mean very low premiums collected. The only danger in this situation is tying up capital that could bring in double or triple the premium with the same investment.

There is a happy medium to this problem that we call the toasty meter. So let's dive into why it was created and how it solves this.

What is the Toasty Meter?

This is a metric that Bread Alerts specifically made to combine the Premium % with the probability of profit. The problem with traders chasing the highest premiums on this site is that the risk may not even be considered. In the opposite scenario, pursuing the highest probability of OTM will lead traders to not maximize for the highest premiums. So we decided to mix the batter with these two metrics to create a new meter that evens out the playing field for all the options on this site. The higher the toasty meter goes, the higher the combined probability of OTM and premium %.

In the example below, you can see that traders can quickly sort for the "toastiest" options to sell by clicking the Toasty Meter.

Best options to sell

Finding the Option and Stock Price within Your Budget

If you want to know which options fit specific account sizes, click the filter button on the top right. For example, all options require 100 shares or the capital reserved to buy 100 shares, so if traders allocate $500 to option selling, they would only be able to sell options for an underlying stock price under $5. Of course, any trader would apply that filter, so only data returned will show options within their budget.

looking for options trades in your budget

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Financial Disclaimer: Market Moves LLC is a company that provides education in financial and stock market literacy. WE ARE NOT FINANCIAL ADVISORS. In fact, it is illegal for us to provide any financial advice to you. Under U.S. law, the only persons who can give you financial advice are those who are licensed financial advisors through the SEC. Results shown from Market Moves LLC or customers who use our product and/or service are individual experiences, reflecting real-life experiences. These are individual results, and results do vary. Market Moves LLC does not claim that they are typical results that consumers will generally achieve. Past performance does not guarantee future results. You should not rely on any past performance as a guarantee of future investment performance.