Well, I own 200 shares of Dell, and after reading the Options Guy's blog and watching Snowman, my friend EnglishTeach, and the rest of the options trading crew in action, I went ahead and sold my first covered call.  I sold two May calls on Dell for $56 a piece.  That's $112 in profit,  The options expire in 29 days.  If the options get executed, I stand to make another $135 or so. 

A few things can happen here. 

1. Dell can break through the $20 level and the options will be executed.  Well, even then, I'll walk away with at least $247 in profit.  I can't really compain about that.   
2. Dell will peak and go back down.  The market received Intel's, Google's, and Research In Motion's earnings well, so the whole sector is starting to pick up steam now.  Dell has been going up for a few days in a row now.  So, I expect a pull back in the next week or two.  They may break $20 and then pull back, or they may pull back before breaking $20.  Either way, I'll will have made money.  If the stock does peak and pull back beneath the $19 range, I can just buy back the option for a huge discount under what I sold it for.  Then, I could even keep the stock and sell another option, or even unload the stock. 

Anyways, that was an easy trade, and even if the stock goes way above $20, I still can't complain too much about making easy money. 

woo-hoo!

Pretty much the same strategy I'm using with AFN and DFR.  I bought DFR at 1.79/share with a 0.40 covered call strike at 2.50 expiring in October.  That made my cost 1.39/share, so upon OE day, if DFR is trading above 1.39, I profit.

AFN is a slightly different story.  I'm holding a single call at 5 expiring next month and I'm awaiting the next earnings announcement to determine which month and strike price I should roll that call out to.  My strategy here is to hold this long term while collecting dividends and reinvesting them.

Wow, you wrote out to Jan 09 covered calls? Usually people like to write the current months covered calls, as time decay on them will decrease the value of the option more rapidly. And then they will be able to write covered calls every month... But I guess there might be some other reason for that.

Anyways, I've been writing covered calls for about a year and a half now. Been writing calls every month, and for the most part have had huge success. The one tip I'd give is that only write calls at a strike price of which you'd be willing to let your shares go at. My biggest losses this year are when I wrote aggressive ATM calls, trying to provide some downside protection. Well, it turns out the stock made huge gains and so I ended up buying back the call at a higher price in order to keep the underlying stock (each one had several reasons for me to want to hold on to the stock- I've wrote a lot of blogs on covered calls, check them out if you have time!).