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A covered call is an options trading strategy that offers limited return for limited risk. A covered call involves selling a call option on a stock that you already own. By owning the stock, you ...
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 ...
A covered call position is a neutral-to-bullish investment strategy and consists of purchasing a stock and selling a call option against the stock. Two useful return calculations for covered calls are the %If Unchanged Return and the %If Assigned Return.
Investors who fail to recognize the trigger for when to write a covered call option may be leaving money on ... For premium support please call: 800-290-4726 more ways to reach us. Mail. Sign in.
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.
For example, holding a $25 AT&T call option allows an investor to buy AT&T for $25 a share at any time up to the option’s expiration. ... they have a “covered” call option.
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