Day trading can be one of the hardest ways to make money in the stock market. From personal experience, the learning curve is steep, and the terminology can feel completely foreign. It also demands your full attention from start to finish, which is almost impossible for anyone transitioning out of a 9-to-5 job.
Instead, I’ve found that trading covered calls is a simpler, lower-stress way to generate additional income. It’s a “set it and forget it” strategy where profits and losses are predetermined, and you don’t have to constantly watch the market.
In this post, I will share how I trade GLD covered calls, the steps I follow, and tips for slightly more experienced traders to follow.
Why I Trade GLD (Gold ETF)
I like owning GLD (SPDR Gold Shares) for several reasons:
- High trading volume, ensuring liquidity
- Physical gold backing, meaning this ETF represents real tangible assets
- Multiple options expirations, includes daily, weekly, and monthly options
I started trading monthly covered calls, which earned me $500–$1,000 per month per 100 shares. While this worked well, I began experimenting with shorting expiration dates to see what results I would get.
Moving to Short-Term Covered Calls
I began exploring weekly covered calls and noticed that GLD has options expiring three times per week (Monday, Wednesday, Friday). By trading shorter-term covered calls, I realized I could potentially increase my income.
Here’s what I discovered:
- Weekly options: Average $150 per week, or $600 per month
- Daily options: Can be traded 2–3 times per week for higher potential returns but with greater risk
- Premium collection: Dependent on the strike price you choose and the volatility of the market
My Covered Call Trading Strategy
Here’s what I did, the process takes 10-15min to setup:
Step 1: Purchase the Stock
- You’ll need to own 100 shares of the stock to avoid borrowing money or using margin
Step 2: Timing Your Trades
- Enter trades after 10:00 a.m. or after significant news events (check ForexFactory.com).
- Check gold futures (GC) to gauge market movement.
- Review gold stock (GLD) chart.
Step 3: Analyzing the Charts
- Use TradingView or Yahoo Finance with the 1 Day candle charts.
- Apply pivot points (paid feature on TradingView) and Bollinger Bands to identify support/resistance levels.
- Any candle bouncing off the Bollinger Bands are potential key levels.
- Take note of any highs and lows on the chart.
Step 4: Choosing Options strike price
- Focus on 20–30 delta options
- Target a minimum premium near $1.00 per week
- Pick strike prices near pivot points (indicator) on the chart
- If the premiums are too low, try choosing a longer expiration date, or waiting for the premiums to increase later that day
**Scaling with Cash-Secured and Naked Puts
Once I built a larger account, I began selling cash-secured puts (CSP) or naked puts:
- CSP/Naked Puts: Collect premiums without purchasing the stock upfront
- Benefit: Lower transaction costs and less risk from a declining stock
Results from My Covered Call Strategy
In the past two months (August–December 2025):
- Average income: ~$800/month
- Trade frequency: 2–3 covered calls per week
- Strategy tested: Daily expirations first, then moving to weekly expirations
**I began this strategy in August. By the end of the year, the value of GLD far exceeded the capital available in my account to cover possible purchase cost.
This shows that short-term covered calls on GLD can be a consistent income source.
Tips for Beginners Trading GLD Covered Calls
- Check gold futures (GC) and GLD stock charts before entering trades
- Review economic news releases to avoid major market swings
- Trade after 10:00 a.m. to reduce early volatility
- Use technical indicators: Bollinger Bands, Pivot Points, review 1 Day charts
- Focus on 20–30 delta options for optimal premium
- Be patient and let the price come to your strike point
Final Thoughts
Trading GLD covered calls is a low-stress strategy to earn income and manage risk. By experimenting with weekly expirations, you will find the approach is quite manageable for those with busy lifestyles. This works well with stocks that are trending upwards or sideways, however avoid using margin. If you want choose monthly expiration dates, you can easily trade the covered call strategy within your registered RRSP or TFSA account. If the stock is out of your price range, start looking for lower priced stocks that have similar liquidity and expiration dates.
Screenshot of my results throughout 2025:
Whether you’re a beginner, part-time or a full-time trader, covered calls can be a reliable way to generate income without having to constantly watch over the market.
Happy Trading
-The Wealthy Sheep 👩🏻💻
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