There are ppl who write ITM covered calls or ITM covered puts. As I have just been pointed out by someone, it's actually a good way to make riskless profit but for directional play ONLY and there has to be an OVERWHELMINGLY STRONG probability that the price is going to move in the direction of the underlying position otherwise you are exposing yourself to high risk of high loss unless you choose to hedge but it's going to eat away at your profit and if you are going to hedge anyway then you might as well not write the option which would expose you to this loss risk in the first place.
Good volatility play and you get to keep guaranteed amount of profit even if you are assigned in directional play ONLY.
No covered call is not used to purchase a stock; it's used to sell a stock or get some income while holding the stock waiting for it to appreciate more in the future. Whenever you are covered, that means you already have the underlying, so no need for options. Writing a put is what you need to use if you want to purchase a stock at a specific price cuz when you are assigned, you get the stock.
No I would not recommend this strategy to someone with minimal experience as there is a lot of calculation and coordination involved to make the spread and trying to salvage the situation when the underlying moves against you.
Yes like I said it would eat into your profit. You would have to buy the call so when the underlying tanks, you are hedged but then again if you are going to buy the call anyway, WHY involve the underlying or writing the call? You are exposing yourself to risk of losses unnecessarily.
no as there is very little technical analysis one can do on option prices.
You are welcome. To me, covered writing of options is an inefficient way to capitalize on directional plays and a risky move for volatility play as it's fully exposed to adverse price movement. This strategy only works when the option price is over-compensating for the IV and chances of that happening is very slim nowadays as the market is very efficient or as I have mentioned before when you are stuck with a stock that's temporarily in the rut but have high upward potential in the future and you want to be there when the stock comes out of the rut and starts moving up again and in the mean time you want to earn some income by writing calls but then again you would still be facing the risk of having your stock being taken away from you when somebody exercises their option to take advantage of a high dividend.
Hope these all helps.
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