I am trying to figure out if this strategy would work, but i'm new to options...so would appreciate some criticism on this strategy. For this example lets assume its a future option on YM, going by todays prices I get the following example: Sell 1 naked call, strike price 11350 for 120 Proceeds=120x5=$600 dollars Now, if price stays anywhere under, no matter how far under 11350 at experiation, I profit $600 If price goes to 11450, I buy 1 YM at 11450, so now its a covered call If price now goes to 12000 at experiation wont matter, they just take my 1 YM at 11450, so i still make profit of $600 correct? Continue assuming price went to 11450, so i bought the 1 ym there, making it a covered call.... If price goes from 11450 to somewhere above 11350 I loose some of my $600 but even if it goes to 11350, i at least still make $100 dollars on the deal when it gets called away.... If price drops from 11450 to below 11350 I eat a loss until the YM stops dropping... and just continue to hold the YM and maybe sell more calls on it... this is the worse case scenario.... So in summary, if the price just drops after selling the call, i make my $600, if it goes to 11450 and continues up from there I make my $600, if it goes to 11450 and then drops, I loose some of my profits... but guranted still $100... if it goes bellow 11350, i lose money on the deal and just keep the YM and play it out at a later date... Did i assume all of this correctly or am I missing some big pieces of the pie?