Buy Write

Buy write

See also Covered Call.

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Buy Write

A situation in which an investor writes an option while holding an equal and opposite position on the underlying asset. A buy write call option occurs when the investor owns the underlying asset and writes a call so that the underlying is on hand to sell to the option holder if the option is exercised. A covered put option occurs when the investor writes a put and has enough cash to cover the strike if the put is exercised. It is thought that utilizing buy write options is a beneficial tactic, as the investor may profit from the option premium. It is also called a covered option.