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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 ...
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 ...
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 ...
However, there are a number of safe call-selling strategies, such as the covered call, that could be utilized to help protect the seller. Call options vs. put options.
It's time to start thinking about covered calls with the recent market selloff spiking in implied volatility ... For premium support please call: 800-290-4726 more ways to reach us. Mail. Sign in.
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