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Here’s how we make our low risk income:

We buy shares in stocks carefully chosen for their high call premiums and safety characteristics. We then sell call options to speculators who are hoping the stock goes up a lot, and more than makes up for the premium they paid us for the right to buy our stock. They buy the call option rather than the stock because it's cheaper to buy the call than the stock. The downside of their strategy is that their option has a time limit, and if the stock doesn’t rise to their expectations within that period, they’ve lost all their money.

As the seller of the call option, we usually don’t care if the buyer exercises the option to buy the stock or not. We make money either way.

• If the stock goes up, we make money.
   
• If the stock goes nowhere, we make money.
   
• If the stock goes down less than the premium we received, we make money.
   
• The only time we don’t make money is if the stock goes down more than the premium we received, but even then we can write more calls on the stock when the current options expire, and still increase our chances of ending the transaction profitably.