Covered Call

Covered Call
A form of option writing or selling in which the seller owns a quantity of the underlying security equivalent to the number of shares represented by the option contracts sold.

covered call investment & finance definition
A short call option that gives the buyer the right to purchase the underlying security at a pre-determined price that is collateralized by the call writer who actually owns the underlying security.

Covered Call
Components
Long the underlying asset and short call options.

Covered Call Writing -
Holding a Stock Through an Earnings Report
by Alan Ellman ...

Covered calls are a way that you can make money off of stock that you already own without selling it. This is a good idea if you have stock that you want to generate profit from, but that you think you should hold onto for the long term.

Covered call writing strategy
Definition:
A Strategy that involves writing a Call option On securities that the Investor owns. See: Covered or Hedge option strategies. ...

Why a Covered Call?
Covered call writing is a bullish, premium selling, strategy. That is - you write a covered call because you expect the stock to go up and because you believe the premium is overpriced.

Selling Covered Calls - Neutral Options Trading Strategy
One of the best techniques when learning how to invest in stocks is selling covered calls.

The Covered Calls strategy can be extremely helpful to produce cash flow or monthly income on stock you already own.

I love writing covered calls about 10-15% below par for stocks that I want to hold long term, but I think are overheated.

Covered Call - A combination of owning shares of a corporation and selling a call option on those shares.
Credit Derivative - Privately held negotiable bilateral contracts that allow users to reduce their exposure to credit risk ...

Just about the only mitigating factor that does place a limit on the potential for loss with an uncovered call is the amount of margin the broker is willing to extend.

Covered Call
A covered call is when the writer sells the call option yet still holds the equivalent amount of shares in the underlying shares.

Covered Call
A covered call is a call that creates an open short position while the seller is also long 100 shares of stock for each call sold.
[MORE] ...

covered call - a call option written by a person who owns the underlying security.
day order - an order to buy or sell a security that expires at the end of the day.

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 Call Write - a strategy in which one writes call options while simultaneously owning an equal number of shares of the underlying stock.

Covered Call
A short call option position where the writer sells a call option while simultaneously owning the number of shares represented by the option contracts.

Covered Call Option Writing
A strategy in which one sells call options while simultaneously owning an equivalent position in the underlying security or strategy in which one sells put options and simultaneously is short an equivalent position in ...

Covered Call
A short call option position against a long position in an underlying stock or futures.
Covered Put
A short put option position against a short position in an underlying stock or futures.

Covered Call - A call option that is sold against stock owned by the writer of the call.

Covered call writing strategy
A strategy that involves writing a call option on securities that the investor owns in his or her portfolio. See covered or hedge option strategies.
Covered or hedge option strategies ...

Covered Call: An option strategy in which the sale of a call option is set against a long stock position. By receiving a premium, the writer intends to realize additional return on the underlying stock.

Covered Call (Writing): A strategy in which one sells call options, while simultaneously purchasing an equivalent number of shares of the underlying security.

Beyond Covered Calls and Naked Puts
If you're already familiar with options, you might be wondering if all I'm doing here is hyping simple covered call and naked put writing strategies.

Writing Covered Call Options
This is an opportunity to win back part of our insurance money. Let’s write a couple of covered Call options. At the stock price of $13.

Covered calls are types of futures contract, the main difference is that the issuer of the call also owns the underlying asset. Because the writer of the call owns the asset outright, he or she is vulnerable to the price volatility.

Covered Calls
Risk: low
Reward: low
General Description
Buying covered calls typically entails selling out-of-the-money call options on stocks that you own.

covered call
When an investor writes call options for a stock that he owns, these are considered covered calls.

Covered call work in this way. You own a stock, just like owning a property you can rent out that stock, with the right to buy at a certain price to somebody else.
Lets look at an example ...

Covered call / Covered call writing
An option strategy in which a call option is written against an equivalent amount of long stock. Example: writing 2 XYZ May 60 calls while owning 200 shares or more of XYZ stock. See also Buy-write and Overwrite.

Covered Calls - A Conservative, Income Based Investment Strategy
by Bob Wilcox ...

Covered Calls
In options, the sale of a call contract while having the equivalent number of shares held back in case of exercise.
CUSIP Number ...

Covered Call
Calls are sold on the underlying currency with strikes which are higher than the market price. The strike price limits the profit that can be realised from the position.
Cross Currency Pairs ...

6 Covered Call Strategies For 2010
By: Jim Nelson
Publish Date: Friday, July 30, 2010
Stocks(s): GE
Sector(s): Conglomerate, Trading Idea ...

2 Selling Covered Calls
You can sell another investor the right to buy your stock from you at a specific price. For example if you buy a stock for $60 you can sell the $65 call and make a premium.

Selling covered calls each month in the option cycle on the stock you already own can significantly reduce the cost you paid for the stock in the first trade. Even if the stock goes down, you can still come out a winner! ...

unconditional Not limited by conditions uncovered call A position to sell (short) a call option where the seller (writer) does not... uncovered option A sold (written) call option or a bought put option whereby the trader does...

Covered Call: A covered call is when the investor owns or buys a stock and writes (sells) a call option against it.

Naked writer
See Uncovered call writing and Uncovered put writing.
Named perils insurance
An insurance policy that names specific risks covered by the policy.

Collar This strategy involves the purchase of stock and the sale of a call against that stock (covered call), while purchasing a put option on the same stock (protective put). Also known as a "fence" or "cylinder".

Covered Call : A term used in the foreign exchange market for the US Doll...
Covered Call Write : A strategy of writing CALL options against a long po...
Covered interest rate arbitrage : An arbitrage approach that consists of ...

This different approach to the covered call write offers less risk and greater potential profit. An Alternative Covered Call Options Trading Strategy
Even beginners may use this strategy to trade a bullish outlook.

High Yield Covered Call: Finding the Perfect Stocks For Covered Calls
Perfect for all Options Traders! Original eBook by Optiontradingpedia.com, the number one online options trading encyclopedia!
This eBook Covers: ...

Covered Call Trading Tips
How to increase your yield on stock options, and covered call options. Pharmaceutical companies are very volatile and are not good covered call candidates.

Covered calls. Boost your returns with options.
Double bottoms, overview. Article explains the 4 varieties.
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ETNs. What are they?
Focus on fundamentals. Picking stocks using fundamental analysis.

See also Covered Call.
Buyback
The covering of a short position by purchasing a long contract, usually resulting from the short sale of a commodity. See: Short covering, stock buyback. Also used in the context of bonds.

First, the difference between naked and covered call writing. When you write a call, you're getting paid a certain amount to take a certain amount of risk -- essentially that you can deliver certain shares at a certain price at a certain time.

An investor constructs a covered call position by buying a security and selling a call option of the same security.

When an investor writes a covered call option on stock held in its accounts, it sells to a third party the right (option) to purchase that stock (call) at a specified price until a specific date.

Let’s say you own 1,000 shares of Microsoft and want to do a covered call. You would sell 10 of the March 25 calls to “open'. Since it is an opening transaction, it would add 10 to the open interest.

Dividend-paying stocks: It may be weeks until your covered call expires, but if it's in the money your stock is likely to be called away the day before the company pays its quarterly dividend.

This strategy is sometimes referred to as an "uncovered call" or a "short call".
Naked Option
An option position where the buyer or seller has no underlying security position.

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In addition to common options trades like covered calls, option spreads, and straddles, many options brokerages offer trading in products related to options, including stocks, ETFs, mutual funds, and bonds ((also known as fixed income)).

For example, in the case of options on futures contracts, a covered call is a short call position combined with a long futures position. A covered put is a short put position combined with a short futures position.

The return on this ETN is linked to the performance of the CBOE S&P 500 BuyWrite Index, also known as the BXM Index. The index is designed to measure the total rate of return of a hypothetical "buy-write", or "covered call", strategy on the S& ...

Finally, covered calls are created by traders to lower their net cost of a stock purchase in exchange for limited upside potential. I think you get the point; there are dozens of strategies that you can use ...

in price, but realizes that there is a chance that it could decline. A put is purchased as insurance to defend against a potential decline, but to compensate for your cost of "insurance" (the put), the investor sells a call, creating a covered call ...

in investments that have historically demonstrated a low degree of risk of loss of principal value. Some examples of typical investments might include high quality; short and medium-term fixed income products, short-term bond funds and covered call ...

See also: Cover, Option, Stock, Market, Options