- call) or sell (put) shares at a particular price and future date.
Covered options writers limit risk by owning the underlying security. The covered writer profits by receiving premiums paid by the purchaser of the options contract. Covered writing is generally more conservative that naked writing, where the options seller does not own the underlying security.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
covered writer — An investor who writes options only on stock that he or she owns, so that option premiums may be collected. Bloomberg Financial Dictionary … Financial and business terms
Covered call — Payoffs and profits from buying stock and writing a call. 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 a stock or other… … Wikipedia
covered call — A short call option position in which the writer owns the number of shares of the underlying stock represented by the option contracts. Covered calls generally limit the risk the writer takes because the stock does not have to be bought at the … Financial and business terms
Covered Put — A put option position in which the option writer also is short the corresponding stock or has deposited, in a cash account, cash or cash equivalents equal to the exercise of the option. This limits the option writer s risk because money or stock… … Financial and business terms
covered put — The sale of a put option while holding sufficient cash to buy the underlying. American Banker Glossary A put option position in which the option writer also is short the corresponding stock or has deposited, in a cash account, cash or cash… … Financial and business terms
Covered call — A short call option position in which the writer owns the number of shares of the underlying stock represented by the option contracts. Covered calls generally limit the risk the writer takes because the stock does not have to be bought at the… … Financial and business terms
writer — The person who sells an option in return for a premium and is obligated to perform when the holder exercises his right under the option contract. Also referred to as the option seller. Chicago Board of Trade glossary One who sells an option. A… … Financial and business terms
covered — 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… … Financial and business terms
Writer's Block Volume 5 — Infobox Album Name = Writer s Block 5 Type = Mixtape Artist = JR Writer Released = flagicon|United States November 20, 2007 Genre = East Coast hip hop Rap Label = Babygrande Length = 41:14 Reviews = *DJBooth.net Rating|3.5|5… … Wikipedia
Covered Straddle — An option strategy that involves writing the same number of puts and calls with the same expiration and strike price on a stock owned by the investor. A covered straddle is a bullish strategy. The covered straddle strategy is not a fully covered… … Investment dictionary