Covered writer

Covered Writer
The writer of an option who also holds a position that is equivalent to, but on the opposite side of the market from the short option position.

Covered writer
An investor who writes options only on stock that he or she owns, so that option positions may be collected.

covered writer
seller of covered options-in other words, an owner of stock who sells options against it to collect premium income.

Also called uncovered writer or uncovered options writer.
Naked Options Expose You To Risk
What is a naked options position?
Conversion Arbitrage: Dividend Risk And Reward ...

The percentage gain that a covered writer would achieve if the underlying futures contract (instrument) is called away. The components of this return are: the original option premium plus any appreciation to the price.

Writer
An investor who sells short put or call options, hoping to retain the income derived from the short sale. A covered writer owns the underlying stock and is hedged.

individuals, mutual funds and other investors to increase the current yield of stocks held and to take advantage of or hedge against unfavorable price declines of the underlying shares. A relatively conservative investment strategy, covered writers ...

does not have long stock to deliver or does not own another call on the same security with a lower or same strike price, and with a longer or same time of expiration. Also called Naked Option. See also Naked Position; Covered Option; Covered Writer.

See also: Long position, Naked Option, Cash conversion cycle, Sell order, Puts and Calls