Covered writing is one of the most popular option strategies: it is both relatively easy to understand and at the conservative end of the risk spectrum, making it attractive to many investors.
There are 2 different ways this position is initiated. In the first, an investor already is long a stock and decides to write calls against these shares, most often because the stock is approaching the investor’s target price. In the second, shares of stock are purchased and calls written simultaneously with the goal of earning a set rate of return - this second alternative is often referred to as a buy/write.
In either case, the investor who has written covered calls will have to face the decisions that arise as expiration approaches.