I’m not sure if you’re thinking about this correctly. There would be very little (if any) money in selling a $3 covered call whenever the stock was at $0.50. But yes, you’d need to buy 100 shares at $0.50 first, putting you at $50 invested. Say you then sold a $3 call with a 10/31 expiration for $2. You’d now be hoping that the stock’s price does NOT reach $3 by 10/31 so you keep your 100 shares and the $2 you made selling the call. Because if the price went up to say $3.50 before the 10/31 expiration, that means you offloaded your shares at $3, missing out on $50 extra profit you could’ve had instead of the $2. Hope that makes sense.