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A covered call is a kind of hedged strategy, in which the trader sells some of the stock’s upside for a period of time in exchange for the option premium. Normally, selling a call option is a ...
A covered call involves selling a call option (“going short”) but with a twist. Here the trader sells a call but also buys the stock underlying the option, 100 shares for each call sold.
For example, imagine a trader bought a call for $0.50 with a strike price of $20, and the stock is $23 at expiration. ... there are a number of safe call-selling strategies, such as the covered ...
A covered option is a financial transaction in which the holder of securities sells (or "writes") a type of financial options contract known as a "call" or a "put" against stock that they own or are shorting. The seller of a covered option receives compensation, or "premium", for this transaction, which can limit losses; however, the act of ...
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. The %If Unchanged Return calculation determines the potential return assuming a covered ...
Option strategies are the simultaneous, and often mixed, buying or selling of one or more options that differ in one or more of the options' variables. Call options , simply known as Calls, give the buyer a right to buy a particular stock at that option's strike price .
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