What strike proximity works best for covered call writing?
The answer depends on several mitigating factors:
What is your basis in the underlying? If your basis is far below the strike of the call, you have to determine whether you want (A) current income while keeping the stock, or (B) a sale of the stock.
If you want current income, but do not want your underlying to be called, an out-of-the-money call makes sense. If the stock price remains below the strike, you will not be exercised and once[...]