There are many reasons investors use options. One of them is to generate consistent monthly income. In March, SmartAsset Advisors published an article discussing 7 Options Income Strategies to Consider.

“A key to getting steady income with options is by making net gains over several trades while mitigating risk,” the article stated.

One of the most common ways to generate income from options is by using covered calls. This strategy is useful when you already own a stock. You generate income by selling a call option with a strike price out of the money and considerably higher than the current share price.

For example, the Dec. 20 $80 call for Trump Media & Technology Group (NASDAQ:DJT) is 121.85% out of the money. By selling the call, you would receive $300 ($3.00 bid price times 100 shares) in income. If the share price doesn’t move over the next 50 days, your return would be 9.1%. On an annualized basis, that’s 66.4%.

Symbol	Price- Type	Strike	Exp Date	Bid	Ask	Last	Volume
DJT	36.06- Call	80.00	12/20/24	3.00	N/A	N/A	1,441

Source: Barchart.com

The thing to be concerned about is if the share price makes a big move to $80 or higher–it could do that if Trump wins the election–you could be forced to sell your shares to the call buyer, maxing out your profit.

Cash-secured puts and protective collars are other ways to generate income from options.

Here are three S&P 500 stocks to generate $1,000 in 30 days using covered calls, cash-secured puts, and protective collars.

Key Points About This Article:

• Walmart (WMT) is an excellent stock to own in any economy.
• Microsoft (MSFT) remains a Magnificent Seven stock worth owning.
• GE Aerospace (GE) has one of the world’s best CEOs.
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “2 Legendary High-Yield Dividend Stocks” now.

Walmart (WMT)

Walmart (NYSE:WMT) is a stock that I like in good times and bad. Further, of the 40 analysts that cover the retailer, 36 rate it a Buy. I don’t think there’s any question about WMT being a long-term buy-and-hold. For this reason, I’ll use a covered call to generate income over the next 30 days.

The important thing here is to find a call out of the money but not so far out that the bid price is insignificant regarding the premium generated. For example, if you sell the Nov. 29 $94 call that’s 14.59% out of the money; the bid price is $0.21, or $21 premium income. That’s not going to get you to $1,000 very quickly.

However, the Nov. 29 $84 call has a bid price of $2.01, 2.5% out of the money. That’s good for 20% of the $1,000 income over 30 days.

Symbol	Price- Type	Strike	Exp Date	Bid	Ask	Last	Volume
WMT	81.95- Call	84.00	11/29/24	2.01	N/A	N/A	41

Source: Barchart.com

Walmart reports earnings on Nov. 19. Good news could push the share price higher than $84, forcing you to sell your shares to the call buyer.

Microsoft (MSFT)

Microsoft (NASDAQ:MSFT) stock had its worst day in two years on Halloween after reporting earnings that included weaker-than-expected Q2 2025 guidance.

“‘We view Q1 results as solid across the core Azure and Office growth businesses, though tempered by a softer Q2 outlook,’ analysts at BofA Global Research wrote in a report on Thursday. They still recommend buying the stock,” CNBC reported.

Suddenly, Microsoft stock isn’t looking so magnificent. It has risen 183% over the past five years, one of the worst performances by a Magnificent Seven component.

However, the long-term prognosis for the AI-focused tech company remains excellent. Of the 58 analysts covering its stock, 91% rate it a Buy.

For this reason, I’ll use Microsoft to generate income from cash-secured puts. This strategy involves selling a put out of the money to gain the premium, ultimately hoping to buy shares at a lower price.

Symbol	Price- Type	Strike	Exp Date	Bid	Ask	Last	Volume
MSFT	406.35- Put	390.00	11/29/24	5.35	N/A	N/A	808

Source: Barchart.com

In this example, you generate $535 ($5.35 bid price) in income from selling the $390 put expiring in 29 days on Nov. 29. Currently, 4.02% is out of the money. If it falls below $390, you’ll have to buy the 100 shares for $39,000, so be sure to have the cash in your account to cover the buy.

The $535 in income is a 16.4% annualized return, which is more than adequate given the company’s quality.

GE Aerospace (GE)

GE Aerospace (NYSE:GE) CEO Larry Culp has done a masterful job delivering value for legacy General Electric shareholders. It will make him a billionaire in the process.

Since GE reported its Q3 2024 earnings on Oct. 22, its shares have lost 11% of their value but remain up 71% year to date through Oct. 31. Its results were good, but profit-taking took hold after the earnings. It’s an excellent long-term hold.

This last income strategy is a protective collar. It involves three things: 1) Buying 100 shares of XYZ, 2) Selling an out-of-the-money call option, and 3) Buying an out-of-the-money put option.

The covered call provides income, while the protective put helps limit the downside. It’s a combination of offense and defense.

Symbol	Price- Type	Strike	Exp Date	Bid	Ask	Volume
GE	171.78- Call	175.00	11/29/24	4.30	N/A	N/A
GE	171.78- Put	150.00	11/29/24	N/A	0.63	N/A

Source: Barchart.com

To earn $1,000 in income for the month, I need $264 from GE stock. With this protective collar, I can generate $367 by buying 100 shares for $17,178, selling the $175 call for $430 in premium ($4.30 bid price), and buying the $150 put for $63 ($0.63 ask price).

In the worst-case scenario, the share price falls to $150 on Nov. 29, and you have a paper loss of $1,811 on the 100 shares you own. Considering its shares have traded over $160 since July, that’s very unlikely.

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