Which of the following best describes the purpose of a covered call strategy?

The purpose of a covered call strategy primarily revolves around generating income while holding an asset. This strategy involves owning shares of a stock (the "covered" part) and simultaneously selling call options on that same stock. By selling the call options, the investor collects a premium, which provides immediate income.

This income can be particularly appealing in a stagnant or slightly bullish market, as the investor benefits from the option premium while still retaining ownership of the underlying asset. The strategy does not protect against significant declines in asset value, nor is it primarily a vehicle for speculation on price appreciation, as the upside potential is capped once the call options are sold. Additionally, while tax considerations can play a role in investment decisions, they are not the primary aim of the covered call strategy.