buy-and-write strategy

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Buy-and-write strategy

An options strategy that calls for the purchase of assets and the writing of covered call options on them.
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Buy-and-Write Strategy

An investment strategy 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 buy write put option occurs when the investor writes a put has enough cash to cover the strike if the put is exercised. It is thought that utilizing buy-and-write strategy is a beneficial tactic as the investor may profit from the option premium. See also: Covered option.
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buy-and-write strategy

The investment strategy often used by covered writers in which stock is purchased and call options written. A buy-and-write strategy is a fairly conservative approach to generating maximum current income from option premiums and dividends.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Size buy-write in Caesars unwind's last week's purchase for $3M gain.
Dynamic Overwrite Fund (NYSE:DIAX), Nuveen S&P 500 Buy-Write Income Fund (NYSE:BXMX) and Nuveen Real Estate Income Fund (NYSE:JRS) pm Saturday released their regular distributions for quarter.
Nevertheless, a "buy-write" strategy might produce desirable results if stocks are in a trading range.
A buy-write strategy for European blue chips -- which combines long equity exposures with sales of call options amid expectations the index moves will be muted -- has earned about 3.4 per cent since May 31, compared with a 2.1 per cent return for the underlying Euro Stoxx 50 index.
CBOE Holdings launched the CBOE S&P 500 Dividend Aristocrats Target Income Index (SPAI), a benchmark index designed to track the hypothetical performance of a partial buy-write strategy applied to stocks contained in the widely utilized S&P 500 Dividend Aristocrats Index, to target a specific level of total income.
Eaton Vance Tax-Managed Buy-Write Income Fund (NYSE: ETB)
Arin's Chief Investment Strategist explains the strategy as: "ALAC+ is well beyond the often used Buy-Write approach (buying underlying shares and selling related options).
The covered call writer either buys common stock and simultaneously sells an equivalent number of call options against the shares purchased (commonly called a buy-write) or sells calls against common stock that is already owned.
10K longer-dated Jan21 7 puts also trade and direction is unclear, as it printed mid-market for 64c with bid-ask 59 - 67c (looks tied, marked buy-write, and possibly a closing sale).
Just as volatility and high prices might make some investors leery of stocks now (see "Buy-write strategies for a flat market"), the threat of rising interest rates may worry fixed income investors.
Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund (NYSE: ETW)