Covered call writing strategy

A strategy that involves writing a call option on securities that the investor owns. See: Covered or hedge option strategies.

Covered Call Writing Strategy

In options, a strategy in which one writes a call option with the intention to avoid a margin account. Because a call writer is obligated to sell the underlying should the option buyer exercise the option, the writer must either already own the underlying or be able to borrow. Using a covered call strategy means the writer already owns the underlying and does not borrow it from a broker. If the writer sells the call at the same time he/she buys the underlying, this is called a "buy-write." If the writer already owned the underlying it is referred to as an "overwrite." In both these situations, the option is immune to margin calls.

单词	covered call writing strategy
释义	Covered call writing strategy Covered call writing strategy A strategy that involves writing a call option on securities that the investor owns. See: Covered or hedge option strategies. Covered Call Writing Strategy In options, a strategy in which one writes a call option with the intention to avoid a margin account. Because a call writer is obligated to sell the underlying should the option buyer exercise the option, the writer must either already own the underlying or be able to borrow. Using a covered call strategy means the writer already owns the underlying and does not borrow it from a broker. If the writer sells the call at the same time he/she buys the underlying, this is called a "buy-write." If the writer already owned the underlying it is referred to as an "overwrite." In both these situations, the option is immune to margin calls.
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