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.

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.

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.
References in periodicals archive ?
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.
Pension Plan Allocations: Analysis of actual pension plan allocations suggests plan sponsors would have benefited from the addition of index-based buy-write option strategies.
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).
Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund (NYSE: ETW)