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A covered call involves selling a call option on a stock that you already own. By owning the stock, you’re “covered” (i.e. protected) if the stock rises and the call option expires in the money.
One covered option is sold for every hundred shares the seller wishes to cover. [1] [2] A covered option constructed with a call is called a "covered call", while one constructed with a put is a "covered put". [1] [2] This strategy is generally considered conservative because the seller of a covered option reduces both their risk and their ...
In this example, the premium cost $2 per contract, so the option breaks even at $22 per share, the $20 strike price plus the $2 premium. Only above that level does the call buyer make money.
A naked option involving a "call" is called a "naked call" or "uncovered call", while one involving a "put" is a "naked put" or "uncovered put". [1] The naked option is one of riskiest options strategies, and therefore most brokers restrict them to only those traders that have the highest options level approval and have a margin account. Naked ...
The writing of the call option provides extra income for an investor who is willing to forego some upside potential. The BXM Index is designed to show the hypothetical performance of a strategy in which an investor buys a portfolio of the S&P 500 stocks, and also sells (or writes) covered call options on the S&P 500 Index.
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Formally, an edge cover of a graph G is a set of edges C such that each vertex in G is incident with at least one edge in C. The set C is said to cover the vertices of G. The following figure shows examples of edge coverings in two graphs (the set C is marked with red). A minimum edge covering is an edge covering of smallest possible size.
An infinite-fold abelian covering graph of a finite (multi)graph is called a topological crystal, an abstraction of crystal structures. For example, the diamond crystal as a graph is the maximal abelian covering graph of the four-edge dipole graph. This view combined with the idea of "standard realizations" turns out to be useful in a ...