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Although all trades in the equities and options markets inherently carry risk, covered calls are seen as a much lower risk proposition. The first step of a covered call is to be long a stock at a lower price than the current market offer, and then you can sell calls against that position.

When you sell a call, you are giving someone the option to call that stock away from you at an agreed upon price (the strike price), if the stock reaches that price by the option expiration date. So if you sell a call, you need to keep your investment goal in mind when setting the strike price.

If you choose a higher strike price the chance of getting your stock called away is less, but the premium you collect is also less. If you do not expect price to rise much, a closer to at-the-money call can be sold, collecting a higher premium. Of course there is a higher probability of having the strike price met.