Buy 100 shares, write a call against them, wait through expiry, and do it again. Booked trade by trade, with the margin account marked the whole way.
The comparison that matters is against simply holding the shares. Writing calls trades upside for income, so the covered book should lag in a rally and cushion a decline.
The shaded band is available funds — equity less the initial requirement, which is the room this account has to put new risk on. It widens to the full equity in the weeks after a call is assigned, because the shares are gone and a flat book requires nothing. Hover to read any date.
Every bar where a contract carried both a two-sided quote and a real trade, regressing the print on the midpoint. If the slope sits near one and the scatter is tight, filling at the mid is a defensible assumption on this name.
Trades that were actually booked. Working orders are not here, and neither is any week where no strike carried a two-sided quote — those went unfilled.
| Time | Instrument | Side | Qty | Limit | Fill | Cash | Rule |
|---|
Position and margin at each session close. The short call carries negative market value because it is a liability, not an asset.
| Date | Cash | Shares | Short call | Spot | Stock value | Option value | Equity | Initial | Maint. | Available |
|---|
| Period | Spot at entry | Strike | Delta | Premium | Close | Outcome |
|---|
At expiry the covered call pays the stock's terminal value capped at the strike, less what the shares cost, plus the premium collected:
Holding the shares alone pays \(\Pi_{\text{BH}} = S_T - S_0\). Subtracting one from the other collapses the whole comparison into a single line:
Premium received, less the upside handed over. Nothing else matters.
So the strategy is a bet that the stock finishes below \(K + P\) — a short volatility position wearing equity clothes. It wins on flat and falling tape and on round trips; it loses on sustained trends. The most it can make is fixed the moment the call is written, while the downside is the stock's own, cushioned by \(P\):
The premium on a call splits into intrinsic value, max(S−K,0), and
time value. Only the time value is income. Writing a call already in the money collects the
intrinsic portion but commits to selling below the current price, handing it straight back,
so the strike sits at or above spot and the whole premium is time value.
There is no roll and no buy-to-close. On the last session of the week the call either finishes below the strike and expires — shares and premium both kept, and the next week's call is written against the same shares — or it finishes above, the shares are called away at the strike, and the following Monday starts flat with a fresh purchase. Fixing the exit this way means every difference in the results traces back to the strike rule rather than to discretion later in the week.
Orders fill at (BID + ASK) / 2 at the timestamp of the order. A multi-leg
order is quoted and competed on as one net price rather than two separate legs, so fills
cluster nearer the midpoint than the two visible spreads would suggest. Where a bar carried
no two-sided quote there is no fill and the week is skipped; inventing a print would
manufacture returns that no one could have captured. The regression above is the test of
whether the assumption holds on this particular name.
Reg T is computable from the position alone, without a broker's risk engine, and it does not vary between brokers. It is also the stricter test: a book that clears Reg T clears portfolio margin, while the reverse does not follow. The short call adds nothing to the requirement here because the shares already cover delivery — a naked call, with no bound on what it could cost to buy the stock and deliver, would be charged heavily.