On Wall Street they are two types of people who give advice about the Stock Market. The first group do not know anything and the second group do not know that they do not know.

Every person has his/her opinion of what to buy and what to sell. The only knowledge we have is how much premium people are willing to pay today in order to own this stock in the future.

A buyer of covered calls has the right to purchase the stock within a specific period of time at pre determined price. The buyer of the covered calls has to pay the seller the premium in cash immediately. The seller keeps the premium money and he has the obligation to deliver the stock at a fixed price to the buyer. The price of the covered calls is determined by what the market perceives are the chances of this stock to go up value.