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A covered call is a basic options strategy that involves selling a call option (or “going short” as the pros call it) for every 100 shares of the underlying stock that you own. It’s a ...
Payoffs from a short put position, equivalent to that of a covered call Payoffs from a short call position, equivalent to that of a covered put. A covered option is a financial transaction in which the holder of securities sells (or "writes") a type of financial options contract known as a "call" or a "put" against stock that they own or are shorting.
These strategies may provide downside protection as well. Writing out-of-the-money covered calls is a good example of such a strategy. The purchaser of the covered call is paying a premium for the option to purchase, at the strike price (rather than the market price), the assets you already own.
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 ...
Opening an Essentials Portfolios account comes with a cash bonus of up to $1,500, plus a $150 rebate to cover any transfer fees you might be charged when you send your funds over to TD Ameritrade ...
TD Ameritrade Offers Mini-Options to Investors and Advisors OMAHA, Neb.--(BUSINESS WIRE)-- TD Ameritrade, Inc. ("TD Ameritrade"), a broker-dealer subsidiary of TD Ameritrade Holding Corporation ...
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.
Level 1: Enables traders to write covered calls, buy protective puts and write cash-secured puts. However, margin approval is required for writing puts. However, margin approval is required for ...