Stock options frighten most investors because they seem complicated and risky. But they do not have to be.

A covered calls a fairly safe way of squeezing a little extra income from stock you already own. when you write a covered call, you agree to sell your shares to another investor at a certain price during a specific period of time. In return for this promise you receive a fee of a few dollar per share.

Example:
Say you own 100 shares of one company's stock, selling for $77 a share. You doubt the price will rise before the end of the year. So, in return for a fee of $2 a share, you agree to sell the stock for $80 a share any time before December 31. If you bet right, the price of the stock will not climb above $80, and the investor who bought your option will decide not to exercise it. You then get to keep your stock. If you are wrong, you will have to sell your stock at $8 while it is still climbing. It either case, you will get to keep the 42 a share.

Not everyone makes money with covered calls. Because of market changes and high brokerage fees. But with practise, try to become better in predicting swings in the market.