How to Build Up Passive Income - Covered Call

This is a passive investment instrument that is often considered risky. But it is not. A covered call is selling the option to buy stock that you own. You do not sell the stock, you only sell the option to buy that stock at a future price and time. The person buying the covered call buys the option at the price you agree upon – actually at which the market agrees upon – and you just sat back and forget it. Well, not quite. The person who has bought the option has the right to buy your stock at any time between the time you sold the option and the expiration of that option. Writing (selling) a covered call is the only options investment that is considered safe enough by the IRS to be included in a 401K or other retirement plans. Homework and thorough studying is a must for generating passive income from cover calls.  By the way, there are traded funds adopting this strategy that you can purchase as a stock in the US exchange.