Covered call


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Covered call

A short call option position in which the writer owns the number of shares of the underlying stock represented by the option contracts. Covered calls generally limit the risk the writer takes because the stock does not have to be bought at the market price, if the holder of that option decides to exercise it.

Covered Call

A position in which an investor short sells or writes an option contract, giving the buyer the ability to buy the underlying asset on demand while also owning the underlying asset. For example, an investor has a covered call position when he writes a call for 100 shares of AT&T and owns at least 100 shares of AT&T. This means that if the holder of the call exercises the option, the investor will be able to sell the shares without a problem. Investors often use a covered call strategy when they do not expect the option to be exercised and simply want to collect the premiums without exposing themselves to the risk of loss if the option is actually exercised.
References in periodicals archive ?
A non-diversified, closed-end management investment company, the fund with total net assets of USD163m, mainly aims to provide a high level of current income by investing primarily in equity securities of natural resources and gold companies and intends to earn short-term gains by writing (selling) primarily covered call options on equity securities in its portfolio.
Credit Suisse AG said it has declared a coupon amount of USD0.0469 for the Credit Suisse X-Links Gold Shares covered call ETN and a coupon amount of USD0.0857 Silver Shares covered call ETN.
It aims at providing a high level of current income and invests primarily in equity securities of gold and natural resources companies and intends to earn income through a strategy of writing (selling) primarily covered call options on equity securities in its portfolio.
Credit Suisse said it has declared coupon payments for the Credit Suisse X-Links Gold Shares Covered Call ETN (NASDAQ: GLDI) and the Credit Suisse X-Links Silver Shares Covered Call ETN (NASDAQ: SLVO).
Coupon payment for gold shares covered call ETN is USD0.0641.
The bank said the coupon payments are for gold shares covered call ETN listed as GLDI on the NASDAQ and silver shares covered call ETN listed on the NASDAQ as SLVO.
M2 EQUITYBITES-October 15, 2015-Credit Suisse declares anticipated October coupon amounts on its covered call gold, silver ETNs
BANKING AND CREDIT NEWS-February 12, 2013-Credit Suisse notes first monthly coupon of USD0.1146 on its Gold Shares covered call ETN(C)2013 M2 COMMUNICATIONS http://www.m2.com
Highstreet Asset Management Inc, which will manage the portfolio and act as options advisor, will from time to time write covered call options in respect of up to 25% of the portfolio to secure income from option premiums in addition to the dividends and distributions generated by Top 20 Dividend Trust.
All the calls sold Monday morning were out-of-the-money at strike prices of either $140 or $142, making them potentially compelling opportunities for covered call sellers given the stock would have to rally at least another 1.4% this week to reach the break-even point on the contracts.
As part of its investment strategy, it intends to employ a strategy of writing (selling) covered call options on a portion of the common stocks in its portfolio.
A covered call strategy can begin with the purchase of a stock that seems appealing.