A derivative investment strategy in which the seller owns the underlying security An investor constructs a covered call position by buying a security and selling a call option of the same security A covered call is a market-neutral investment strategy that protects the investor from the downside of owning a stock, while still affording him some of the upside BACK TO TOP
overlaid or spread or topped with or enclosed within something; sometimes used as a combining form; "women with covered faces"; "covered wagons"; "a covered balcony"
having the head and face covered; "the bride's veiled head"; "veiled Muslim women
The writing of an option when the writer also owns the underlying security on a one to one ratio
A person covered by a pension plan is one who has fulfilled the eligibility requirements in the plan, for whom benefits have accrued, or are accruing, or who is receiving benefits under the plan
A written option is considered to be covered if the writer also has an opposing market position on a share-for-share basis in the underlying security That is, a short call is covered if the underlying stock is owned, and a short put is covered (for margin purposes) if the underlying stock is also short in the account In addition, a short call is covered if the account is also long another call on the same security, with a striking price equal to or less than the striking price of the short call A short put is covered if there is also a long put in the account with a striking price equal to or greater than the striking price of the short put