A call option is a contract which allows the owner the right to purchase the underlying stock at a predetermined price (the strike price) over a specific time period. Covered Calls work by holding a security and selling (“writing”) a call option on that security. By selling the option, the portfolio receives the call premium which provides additional cashflow compared to only owning the security. The return on the security is capped by the strike price of the call option. Covered call strategies participate in market appreciation up to the strike price of the options considering the percentage of the overwritten portfolio. Covered call strategies buffer some downside market depreciation based on the additional cashflow. In volatile times, performance will vary based on intra-period market movement.