Overwrite(redirected from overwrote)
Also found in: Dictionary, Thesaurus, Encyclopedia.
Related to overwrote: overwrought
An option strategy that involves writing more option contracts than the writer expects to have exercised. A writer overwrites contracts in order to collect the premiums. He/she chooses the securities underlying the contracts based on whether they are overvalued or undervalued. One overwrites calls if one believes that the underlying securities are overvalued because one expects a price correction that will result in the calls going out-of-the-money. For the same reason, one overwrites puts if one believes that the underlying securities are undervalued.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved