Investment and Options Strategist
Summary: Mini-options on ASML now allow investors with just 10 shares to generate income using the conservative covered call strategy. This article explains how it works, what the potential outcomes are, and why it’s a game-changer for long-term investors seeking to make their portfolio more productive.
A new way for long-term investors to put their shares to work
ASML is one of Europe’s most successful tech companies. Many long-term investors hold the stock as part of a buy-and-hold strategy, believing in its future role in the semiconductor industry.
But at over €660 per share, buying 100 shares — the minimum needed for a traditional options strategy — would cost over €66,000. Until recently, that meant selling covered calls was out of reach for many smaller investors.
That has changed.
Mini-options are a new type of option contract that represents just 10 shares instead of 100. This makes conservative option strategies, like covered calls, finally accessible to smaller shareholders.
What is a covered call? It’s when you sell a call option on a stock you already own. If the stock price stays below the option’s strike price, you keep your shares and receive the option premium as income. If the stock rises above the strike, your shares may be sold at that level — but you still keep the premium.
Let’s walk through a practical example.
The strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it's crucial to make informed decisions.
You own 10 shares of ASML, currently worth €660 each.
You decide to sell one call option with a strike price of €710, expiring on 20 June 2025. This call option represents your agreement to sell your 10 ASML shares at €710 if the buyer exercises the option.
In return, you receive a premium of €85 for selling this option. That’s about 1.3% of the current value of your ASML shares (€660 x 10 = €6,600). If you were able to repeat this strategy monthly, it could potentially generate over 15% annualised income — though actual returns may vary and depend on market conditions and option pricing.
| Scenario | Outcome |
|---|---|
| ASML stays below €710 | You keep your shares and the €85 premium as income. |
| ASML rises above €710 | You must sell your shares at €710. You keep the €85 premium and profit from €660 to €710. |
| ASML drops below €660 | Your shares lose value. However, the €85 premium provides a small cushion against the loss. |
This premium sets the price at which your profits are capped — €718.50. Beyond this level, your gains no longer increase, since you're obligated to sell your shares at €710, but you’ve already collected €85 in premium. Importantly, this capped profit includes the increase in share price from your original purchase level of €660 up to the €710 strike, which means you also benefit from a €500 capital gain in this example.
A simple table like this can help visualize the trade's potential outcomes:
| ASML at Expiry | Result | Profit/Loss |
| €640 | Keep shares | Approx. –€20 (offset by €85 premium) |
| €660 | Keep shares | No gain on stock, €85 premium kept |
| €710 | Shares sold | €500 stock gain + €85 premium = €585 total gain |
| €740 | Shares sold | Same result as above — gains capped at €585 |
This strategy doesn’t require you to sell your shares unless ASML moves significantly higher. And even then, you still earn a solid return.
For long-term investors who want to generate income without giving up core holdings, a covered call using mini-options:
Q. Do I need to monitor this every day?
A. No. You mainly need to watch around the option’s expiry date.
Q. Can I lose money?
A. Yes — if ASML drops sharply, your shares lose value. The premium helps, but doesn’t remove risk.
Q. Will I miss out if ASML soars?
A. Yes — your profit is capped at the strike price. But you’ll still come out ahead.
Q. Are mini-options available on other stocks?
A. Yes, but only on selected names. Check your platform for details.
Q. Do I need approval to trade options?
A. Yes. Most brokers will require you to apply for options trading access.
Q. Why is there a margin requirement even for covered calls?
A. Although covered calls are relatively conservative, a small margin requirement is still needed. This ensures that your account has enough available capital to buy back the option if needed — for instance, if you choose to close the position early or if the market moves sharply and your broker requires action. It’s a safeguard to ensure the trade can always be managed responsibly. Yes. Most brokers will require you to apply for options trading access.
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