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Company A is currently trading at $100.

I bought 10 calls at a $110 strike price which expire in six months.

What would be the best strategy (risk to reward) to buy or sell monthly options against the above position to collect a premium?

I don't think will go above will trade above $110 in the next few months.

Is a covered call the best option? Should it be in the money or out of the money?

I have tried searching google but I'm just bit confused.

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With all due respect, yes, you are confused. You need to read a good book on options to get a better grip on all of this.

A covered call is long the stock and short the call. Since you bought XYZ calls (not stock), a covered call is not applicable here. However, when you sell an option as part of a spread, depending on the terms of the long leg, the short leg may or may not be covered for margin purposes - but that's not a covered call.

If you buy additional options against your current ten XYZ $110 calls, you will not "collect a premium" for them. It's a debit and you will just be leveraging your long bullish position even more.

Because you don't think that XYZ will will trade above $110 in the next few months, that would be the strike price to be selling rather than buying.

IMO, a better approach would have been a diagonal spread. Perhaps buy the 6 month $105 call and sell shorter term $110 calls against them (1 to 3 months out depending on the premium). Ideally, the $110 calls would expire worthless and you could then write calls again, bringing in more premium. The ideal expiration would be for XYZ to be near but under $110 so that you could then write another round of 1-3 month calls but this time at a strike price of $115. If lucky, wash, rinse, repeat.

If after some time (but before near term expiration) XYZ moves to $110, there could be a decent amount of time decay in the $110 calls and you'd have the opportunity to roll them up and/or out, bringing in additional time premium. If you wait until XYZ has risen significantly above $110, this is less viable.

Back to your existing position: Another possibility would be to sell $115 calls against your $110 call position (vertical or diagonal spread) but they are rather out-of-the-money and the premium available is likely to be bupkus, especially for nearer term calls.

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