The selling of a call option while simultaneously holding an equivalent position in the underlier. This is an attempt to take advantage of a neutral or declining stock. If the option expires unexercised, the writer keeps the premium. If the holder exercises the option, the stock must be delivered, but, because the writer already owns the stock, risk is limited. This is the opposite of an uncovered call, when the writer sells a call for a stock that he/she does not already own, a dangerous strategy with unlimited risk.
Related information about covered call:
- Covered call - Wikipedia, the free encyclopedia
A covered call is a financial market transaction in which the seller of call options owns the corresponding amount of the underlying instrument, such as shares of ...
- Covered Call Definition | Investopedia
An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset in an attempt to generate increased ...
- The Basics Of Covered Calls
Let's take a look at the covered call and examine ways that you can use it in your ... Covered call writing is simply the selling of this right to someone else in ...
- Covered Call
Description. An investor who buys or owns stock and writes call options in the equivalent amount can earn premium income without taking on additional risk.
- covered calls - Covered Call .Com has been providing covered call ...
The web's premier covered call guide for the serious covered call writer. The site was founded by a covered call writer for writers of covered calls.
- Covered calls-covered call strategy
A covered call writer or “seller” is an investor who sells an option to buy their shares. In our model, we recommend writing covered calls on Exchange Traded ...
- Covered Call by OptionTradingpedia.com
Learn everything about the Covered Call options trading strategy as well as its advantages and disadvantages now.
- CBOE - Equity Option Strategies - Covered Calls
In addition, the covered call generates income from the premium received from ... Covered call writing is either the simultaneous purchase of stock and the sale ...