Most "best stocks for covered calls" articles are listicles assembled from whoever ranked highest in the writer's recall. The criteria are vague ("stable, blue-chip, decent yield"), the data is stale, and there's no actual screening logic shown.
This post is different. The methodology section walks through the actual filter criteria, and then the names are the output of those filters applied to current data. You can replicate this on any screener — the same way I run it weekly on my actual portfolio.
The seven names below are stocks I currently hold or actively consider for covered call income. Your list may differ based on your account size, sector exposure preferences, and risk tolerance.
The Screening Criteria
A good covered call stock has five characteristics:
- Liquid weekly options. Tight bid/ask spreads, deep open interest. Without liquidity, you give back premium to the market maker on every trade.
- IV rank in the 30th-70th percentile range. Too low and the premium isn't worth collecting. Too high and the underlying is moving more than the premium can compensate.
- No earnings within 14 days of typical expiration windows. If the position is locked into earnings exposure, the premium math gets hijacked by the print.
- Fundamentals you'd be willing to own long-term. Assignment is a real outcome. If you wouldn't be happy continuing to own the underlying after assignment, the strategy isn't appropriate for that name.
- Reasonable share price. $50-$500 range typically. Below $50, the premium per contract is small relative to fees and effort. Above $500, position sizing per contract gets unwieldy for normal-sized retail accounts.
These five criteria knock out most of the S&P 500 immediately. What's left is a smaller universe of stocks where the math actually works.
The Seven
In rough order of how often I write calls on each:
1. MSFT (Microsoft)
Why: The poster child for steady CC income. 30D IV of 18-25%, predictable earnings cycle (±4% moves), modest dividend, weekly options with deep liquidity. The "boring" answer to "what stock should I write calls on."
Strategy: 0.20-0.25 delta, 30-45 DTE. Avoid earnings windows. Roll only when needed.
Realistic monthly yield on cost basis: 0.5%-0.8%
For details: MSFT Covered Calls — The Steady Premium Machine.
2. AAPL (Apple)
Why: Similar profile to MSFT — moderate IV, predictable earnings, real dividend, excellent options liquidity. Slightly higher IV than MSFT, slightly more earnings move.
Strategy: 0.22-0.25 delta, 30-45 DTE. Skip earnings windows. Watch ex-div dates for early assignment risk on ITM contracts.
Realistic monthly yield on cost basis: 0.5%-0.9%
For details: AAPL Covered Calls — A Complete Guide.
3. AMZN (Amazon)
Why: Post-split, AMZN became finally accessible for normal-sized retail accounts. Moderate IV, no dividend complications, decent earnings predictability outside of AWS surprises.
Strategy: 0.18-0.22 delta, 30-45 DTE. Avoid Q3 (October) earnings especially — the AWS-related earnings surprises can be sharp.
Realistic monthly yield on cost basis: 0.7%-1.1%
For details: AMZN Covered Calls — Post-Split Opportunity.
4. GOOGL (Alphabet)
Why: Similar profile to AMZN. Moderate IV, no dividend, predictable earnings cycle. Strong options liquidity. Often slightly underpriced relative to the AI sector — meaning IV occasionally pays better than the realized vol justifies, which is good for premium sellers.
Strategy: 0.18-0.22 delta, 30-45 DTE. Skip earnings windows. Particularly attentive around Q1 earnings (January) when YouTube/Cloud results often drive the print.
Realistic monthly yield on cost basis: 0.6%-1.0%
5. META
Why: Higher IV than the other mega-caps, which means meaningful premium between earnings cycles. The downside is the size of earnings moves — META can drop 15-25% on a bad print.
Strategy: 0.17-0.22 delta, 21-35 DTE. Skip the 14 days before and 7 days after earnings absolutely.
Realistic monthly yield on cost basis: 0.8%-1.5% (excluding earnings windows)
For details: META Covered Calls — The Earnings Rollercoaster.
6. KO (Coca-Cola) or JNJ (Johnson & Johnson) — pick your dividend stalwart
Why: Low-IV dividend stocks. Premium per contract is small but the dividend layer adds real income. These are the "set it and forget it" names that don't require active management.
Strategy: 0.15-0.20 delta (stay further OTM to preserve extrinsic value above the dividend, avoiding early assignment), 30-45 DTE. Track ex-div dates carefully.
Realistic monthly yield on cost basis: 0.3%-0.6% on premium, plus the dividend layer (~3-3.5% annual)
For details: Covered Calls on Dividend Stocks.
7. SPY or QQQ (broad-market ETFs)
Why: Diversification in a single ticker. SPY/QQQ options are the most liquid options in the world. No earnings risk (the ETF doesn't report — its components do, but the diversified exposure dampens any single-stock event). Lower IV than most individual stocks, but the absence of single-stock blow-up risk is valuable.
Strategy: 0.15-0.20 delta, 30-45 DTE. Watch for FOMC meeting weeks (can produce sharp moves) and the early-quarter earnings cluster (Q1 earnings season can move the indices).
Realistic monthly yield on cost basis: 0.4%-0.7%
These are the "income with diversification" trade. Not as flashy as NVDA but vastly more predictable.
What Didn't Make the List (and Why)
A few notable omissions worth explaining:
NVDA and TSLA — Excluded from the "best for income" list despite having the highest premiums. The IV is so high and the moves so violent that consistent income requires specialized management. They're great for opportunistic CC writing but not for someone building a core income portfolio. See NVDA Covered Calls and TSLA Covered Calls for detailed playbooks.
Banks (JPM, BAC, etc.) — Reasonable CC candidates but with earnings sensitivity to NIM and credit quality that makes the cycle harder to predict than tech. Workable, just not in my top 7.
Energy (XOM, CVX) — IV depends heavily on commodity prices. The premium can be excellent in volatile commodity periods and meaningless in flat ones. Hard to plan around.
Biotech, small caps, growth names — Too binary. Earnings can produce 30-50% moves. Not appropriate for an income strategy.
REITs and high-dividend payers — Often have illiquid options. Even when the share price and dividend look right for income, you can't write calls efficiently without losing significant edge to the bid/ask spread.
Building a Real Portfolio
If I were starting from scratch with $75,000 to deploy specifically for covered call income, the rough allocation:
- MSFT: 20%
- AAPL: 15%
- GOOGL: 15%
- AMZN: 12%
- META: 10%
- KO or JNJ: 12%
- QQQ or SPY: 16%
That's seven positions, each large enough to support 100+ shares for covered call writing, with sector and IV diversification. Expected monthly premium: 0.6%-0.9% blended yield, or roughly $450-$675/month before tax.
This is not advice for anyone's specific situation. It's the framework I'd use for my situation if I were starting over. Your tax situation, brokerage capabilities, and existing holdings should drive the specifics.
For a deeper treatment of the math, see How to Generate $500/Month in CC Income.
How I Actually Run This
Every Sunday I open Myron, look at the screen for each of these positions, and write the calls that match my filters (0.20-0.25 delta on stable names, 0.10-0.15 on high-IV names, no earnings within the expiration window). The whole process takes 15-20 minutes for the full portfolio.
You don't need any specific tool for this — you can build the screen manually on Barchart or MarketChameleon. What matters is having a defined universe (the seven names above or your own list), a defined screen (delta, DTE, earnings filter), and the discipline to apply both consistently every week.
For supporting strategy, see What Delta for Covered Calls, When to Roll a Covered Call, and the individual ticker guides linked above.