Return if Exercised

Return if Exercised

The return that a covered call writer would make if the underlying stock were called away.

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Return If Exercised

The return that the writer, or seller, of a covered call would make if the buyer decides to exercise the option (or buy the underlying asset at the stated strike price). This return will likely be less than if the writer sold the underlying asset at the current market price. Otherwise, the option probably would not have been exercised.

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved