We get asked all the time, what are the best stocks for covered calls in 2025? These are some of the top options now, according to the VectorVest system:
- Ford Motor Company (F)
- Lowe’s Companies, Inc. (LOW)
- PepsiCo, Inc. (PEP)
- Walmart Inc. (WMT)
- ConocoPhillips (COP)
- Johnson & Johnson (JNJ)
- Verizon Communications (VZ)
- Oracle Corporation (ORCL)
- Apple Inc. (AAPL)
- Microsoft Corporation (MSFT)
The goal is to uncover stocks with ample liquidity, some degree of predictability, and moderate volatility. This makes high dividend stocks a great choice.
We’re not just here to unveil the best stocks for selling covered calls, though. We want you to be able to find these opportunities yourself, which is why we’ll walk you through how to find stocks for options trading below.
But if you just want to streamline your stock picking strategy, look no further than VectorVest: the best stock picking app ever. It has outperformed the S&P 500 index by 10x over the past 20 years and counting, all while saving investors time and stress.
When paired with the OptionsPro integration, the possibilities become even more profound. Discover what our stock software can do for you today!
Table of contents
Key Takeaways on the Best Covered Call Stocks
- The best stocks for covered calls tend to have high implied volatility (so you can earn more income), a relatively sideways or slightly bullish outlook, plenty of liquidity, and strong dividend yields.
- Some of the best covered call stocks today are Ford (F), Lowe’s (LOW), PepsiCo, Inc (PEP), Walmart Inc. (WMT), and ConocoPhillips (COP).
- In general, you’ll find that high-priced growth stocks like tech companies or large-cap leaders are good candidates, as are blue-chip dividend stocks.
- Aside from good covered call stocks you can consider covered call ETFs or a poor man’s covered call.
- VectorVest makes it easy to consistently uncover the best stocks for covered calls on autopilot. Set yourself up for success and win more trades with less work today.
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Overview of Covered Calls
Stock options are contracts granting the holder the right (but not the obligation) to either buy or sell an asset at a predetermined price (known as the options strike price) before a predetermined date (known as the stock options expiration date).
Covered calls involve holding a long position in a stock while simultaneously selling call options on that same stock. The goal is to generate additional income from the premiums received for selling the call options, which can provide a steady stream of income and potentially enhance overall returns.
A covered call strategy is considered relatively conservative because it leverages an existing stock position, reducing the risk compared to other options strategies that may involve naked positions or require significant margin.
Meanwhile, the income generated from selling call options can help offset potential losses in the stock, making this strategy attractive in stable or slightly bullish markets. So, what happens when options expire under this strategy? It can go one of two ways:
- If the stock price remains below the strike price of the sold call options, the options expire worthless, allowing you to keep the premium and the stock. This is the best-case scenario.
- But if the stock price rises above the strike price, the options may be exercised, and you’re obligated to sell the stock at the strike price. You still benefit from the premium and any gains up to the strike price but you miss out on any additional upside beyond that point.
Learning how to sell options profitably is all contingent on choosing the best stocks for covered calls – so let’s get into some of the key criteria you should consider.
What to Look for in the Best Covered Call Stocks
While we are going to point you in the right direction with 10 of the best covered call stocks in 2025 momentarily, you have to be able to uncover these types of opportunities on your own to enjoy repeated success for years to come.
So, here are the most important things to assess in choosing stocks to sell covered calls on.
Stable and Predictable Stock Performance
While you don’t know with complete certainty what will happen to a stock’s price performance over a 30, 60, or 90-day span, the ideal stocks for covered calls are those with relatively stable or moderately bullish price movements.
Volatile stocks have large price swings that make it challenging to predict outcomes. Stable stocks allow you to collect premiums without the risk of significant price drops or missing out on substantial gains.
High Liquidity
Ample liquidity ensures tighter bid-ask spreads, which reduces trading costs and allows you to enter and exit positions more easily. Liquid options also provide more flexibility in selecting strike prices and expiration dates that align with your strategy.
Attractive Option Premiums
Stocks with higher implied volatility tend to have higher premiums, but it’s essential to balance this with the need for stability. We talk about this in our more detailed guide on implied volatility in options trading.
Ensure the stock’s volatility is not excessively high, which could increase risk. Again, the goal is to stack the deck in your favor by choosing stocks with lower volatility.
Strong Dividend Yield
Stocks that pay dividends provide an additional income stream, enhancing the overall return of your covered call strategy. Ensure the dividend yield is attractive and the company has a history of consistent dividend payments.
We have more tips on how to invest in dividend stocks along with resources on the safest dividend stocks, the best blue chip dividend stocks, and more.
Sound Financial Health
Strong fundamentals such as consistent revenue growth, profitability, manageable debt levels, and positive cash flow are indicators of a company’s stability. Financially healthy companies are less likely to experience drastic price drops, making them safer for covered call strategies.
So, learn how to do fundamental analysis of stocks, or better yet, how to combine fundamental and technical analysis, in our blog. We also have a stock fundamental analysis tool that can streamline this for you. Otherwise, you can find this data on free stock analysis websites.
Sector Strength
It’s also worth zooming out and not just looking at the best stocks for covered calls, but sectors that support a repeatable strategy. Stocks in sectors with positive growth prospects and stable performance are more likely to provide the consistency needed to sell covered calls.
What are the Best Stocks for Covered Calls in 2025?
So, what are the best stocks for covered calls in 2025? VectorVest tracks more than 18,000 stocks on a daily basis. We’ve taken these insights and uncovered the 10 best covered call stocks to point you in the right direction.
However, we encourage you to perform your own research on these stocks before actually making your next move. The stock market is constantly evolving and you need to stay up to date, which is why having access to the best stock research sites like VectorVest is so powerful!
Ford Motor Company (F)
- Typically trades in the low-teens
- 4% dividend yield offers steady income
- High options liquidity = easy to enter/exit covered calls
Ford Motor Company is undoubtedly one of the best stocks for selling covered calls due to its stable price performance and high liquidity. F often oscillates in the low-teens but has dipped below at times.
Ford’s dividend yield stands at around 4%, providing an attractive income stream. The Ford options market is highly liquid, offering ample opportunities for covered call strategies. This makes it a reliable stock for generating option premiums.
Lowe’s Companies, Inc. (LOW)
- Anchored in home improvement market
- 2% dividend with consistent earnings growth
- Low volatility makes it ideal for stable covered calls
Lowe’s is another solid pick for covered calls given its financial health and market position in the home improvement sector. The company has consistently reported strong earnings and revenue growth, supported by a solid housing market and consumer spending on home improvement.
Lowe’s offers a dividend yield of approximately 2%, and its options are highly liquid. Its steady performance and strong fundamentals present an attractive stock for covered calls with a balanced risk-reward profile.
PepsiCo, Inc. (PEP)
- Dividend aristocrat with a 2.5% yield
- Low volatility + high liquidity = reliable premiums
- Steady performance thanks to global brand portfolio
PepsiCo, Inc. has earned a spot on our list thanks to its stable earnings and strong dividend history. Its dividend yield of around 2.5% and long history of dividend increases actually make it one of the best dividend stocks, and this in turn makes it great for writing covered calls.
PepsiCo’s diverse product portfolio includes popular brands like Pepsi, Lay’s, and Quaker, ensuring steady revenue streams.
The stock’s low volatility and high liquidity allow you to earn attractive premiums while holding a reliable, dividend-paying stock that generates supplemental income in the here and now, too. It’s the best of both worlds!
Walmart Inc. (WMT)
- Up 7% in 2025 YTD, still viable for calls
- 1.6% dividend yield with moderate price movement
- Strong fundamentals and low volatility reduce downside
Walmart Inc. has climbed over 7% thus far through 2025, but it’s still a great opportunity for those seeking to write covered calls. It boasts an attractive dividend yield of about 1.6% and its high liquidity facilitates smooth options trading.
Walmart’s stock typically exhibits low to moderate volatility, too, making it less risky for covered call strategies. The company’s strong market position and consistent financial performance provide a dependable foundation for its stock.
ConocoPhillips (COP)
- 4.8% dividend yield backed by strong cash flow
- Moderate volatility = juicy premiums with less risk
- Down 2% in past 6 months, may be a discounted entry
ConocoPhillips has one of the higher dividend yields on this list at around 4.8%. It has high liquidity to back it up, too. The stock’s price stability is supported by strong cash flow from diversified energy assets, making it ideal for covered call strategies.
ConocoPhillips’ stock usually shows moderate volatility, which allows you to capture favorable option premiums without excessive risk. While you should assess the opportunity yourself, now could be a good time to buy COP at a discount, too, as it has fallen nearly 2% in the past 6 months.
Johnson & Johnson (JNJ)
- Defensive sector play with a 2.8% dividend
- Low volatility, great for conservative strategies
- Stock is up 21% YTD
Johnson & Johnson is a medical manufacturing giant with low volatility and an attractive dividend yield of approximately 2.8%. The stock’s high liquidity ensures easy execution of options trades.
Johnson & Johnson’s diverse business segments, including pharmaceuticals, medical devices, and consumer health, provide a stable revenue base that remains resilient in the face of market downturns.
The stock itself slipped early in 2025, but is up nearly 22% YTD now. Given the role this company plays in keeping our world healthy, it’s almost always a safe buy.
Verizon Communications (VZ)
- Stable trading range in 2025
- 6.6% dividend yield – highest on this list
- Extremely high liquidity for smooth trade execution
As one of the telecommunications leaders, Verizon Communications is an excellent choice for anyone seeking the best stocks for covered calls strategies.
VZ has traded in a relatively tight band this year, attractive for covered-call writers seeking steady premium.
It also has one of the higher dividend yields on this list at 6.6% paired with low-to-moderate volatility, which presents a good middle ground from a risk-to-reward perspective. Trading activity is incredibly high for this stock, too, which makes for efficient options transactions.
Oracle Corporation (ORCL)
- AI and cloud services driving strong earnings
- Most volatile stock on this list – higher risk/higher reward
- Very strong YTD momentum and high velocity
Oracle Corporation continues to leverage AI to improve its legacy products, driving earnings growth from its cloud services and software products and returning those profits to shareholders.
In fact, it has been paying out dividends since 2009, with the current dividend yield falling at right around 1.14% and an annual dividend of $1.60. So while the dividend payouts won’t make you rich, you’re still getting consistent returns from holding this stock.
This is perhaps the most volatile stock we have on this list, which means you’ll need to exercise caution in writing covered calls for it. We wanted to include it because it shows impressive stock price appreciation. Among the more volatile names on this list; look for pullbacks or elevated IV to target richer premiums.
Apple Inc. (AAPL)
- 0.6% dividend, but $3.2T market cap provides security
- Low-to-moderate volatility supports safe covered calls
- Up 9% in the past month
Apple Inc. may not jump out as one of the best covered call stocks given its dividend yield of about 0.6%. But despite the lower yield, Apple’s stock is highly attractive due to its impressive market cap of $3.21 trillion and stable price movements. Its moderate volatility is ideal for generating options premiums without substantial risk.
Apple’s strong earnings growth, driven by its innovative product line and services, provides a solid foundation for its stock. This tech stock is not one we’d ever bet against, and the performance speaks for itself. It has climbed 9% in the past month.
Microsoft Corporation (MSFT)
- AI & cloud innovation fueling growth
- 1% dividend yield with high liquidity
- Nearly 28% price movement over last 6 months = stable covered call pick
Finally, we have Microsoft – another tech darling that poses a compelling choice for anyone seeking the best stocks for covered calls. This behemoth is highly liquid for efficient options trading and actually holds a larger market cap than Apple at $3.35 trillion.
This is driven by its continuous innovations in the technology sector, from its cloud computing software products to AI investments which are finally starting to come to fruition.
It has a low dividend yield of 1% as well but is seen as a very stable and reliable stock for options trading strategies. It has moved 28% in the past 6 months so you can feel fairly confident writing covered calls with this stock.
Uncover the Best Stocks for Selling Covered Calls With VectorVest!
Now that you’re up to speed on the best covered call stocks in 2025, the only thing left to do now is hit the ground running with this strategy. Or, better yet, set yourself up for seamless success with the best app for stock analysis, VectorVest.
It’s a proprietary stock rating system that tells you what to buy, when to buy it, and when to sell it – eliminating stress, uncertainty, emotion, and human error from your decision-making. It saves you time too by boiling down complex stock indicators into simpler ratings.
If you’re ever in doubt about the best stocks for selling covered calls, simply pull up the stock advisory and navigate to our pre-curated screeners. We have a list of the best option stocks at any given time, so you never have to look far for your next opportunity.
The real benefits come from integrating VectorVest with OptionsPro, though. This is a suite of proprietary tools that help you execute a successful options trading strategy on autopilot. You’re able to scan a list of stocks and pinpoint those that present the greatest probability of profits.
Beyond uncovering opportunities, it helps you perfect your strategy by finding strike prices that offer the best value from a risk-reward standpoint. You can also see what your odds are when configuring a strike and expiration to skew the probability in your favor.
We’re confident you’ll find it easier to make money trading options with VectorVest and OptionsPro, but why not experience the best beginner investment app firsthand and see for yourself? You can even get a free stock analysis today to see what’s possible.
Final Thoughts on the Best Stocks for Covered Calls
That concludes our guide on the best covered call stocks. While this strategy can help you squeeze out higher returns, it’s all contingent on choosing the best stocks for selling covered calls. Remember to look for stability, liquidity, and moderate volatility.
But rather than learn options trading the hard way, why not set yourself up for smooth sailing with VectorVest, the best iPhone stock app and the best Android stock app at your disposal?
Whether you’re looking for the best stocks for covered calls, aggressive growth stocks, falling stocks to buy, current undervalued stocks, or even the best stocks for beginners, the system can save you time and stress while helping you dominate the options field.
So, leverage our precise analytics and tools to help you make confident, data-driven decisions in your covered call strategies. It’s the best Motley Fool alternative, Seeking Alpha alternative, Morningstar alternative, and even TradingView alternative. See for yourself – enhance your investment strategy with VectorVest today!
Frequently Asked Questions
What is selling a covered call?
You’re writing a call option against shares of a stock you already own. This means whoever buys the contract has the right to buy your stock at a set price, by a set date, in exchange for a cash premium.
Is selling covered calls risky?
It’s a lower-risk strategy compared to naked calls, but you’re capping your upside. You’re required to sell your position at a lower price if the stock surges past the strike price set in your contract, so you could miss out on higher gains.
What is the most profitable way to sell covered calls?
The sweet spot is finding liquid, high-quality stocks with stable or moderate upward movement and consistently high option premiums. A lot of traders try to sell out-of-the-money calls about 30-45 days. This gives you a solid balance between income potential and control.
What are the best stocks for covered calls?
Look for large-cap stocks, tech companies, or any sort of blue-chip stocks. In general, you want stocks with relatively sideways movement but plenty of volatility. You can’t go wrong with tickers like F, AAPL, MSFT, LOW, or anything from our list of the best stocks for covered calls.
How to do poor man’s covered call?
Instead of buying 100 shares, you buy a long-dated in-the-money call and sell short-term out-of-the-money calls against it. This gives you pretty similar exposure, but you need a lot less capital to execute this play.
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