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Covered writer |
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Covered writerAn investor who writes options only on stock that he or she owns, so that option positions may be collected.Covered writer Similar MatchesCovered interest rateCovered interest rateThe covered interest rate, in a currency other than your own, is the nominal interest rate plus the forward premium on the currency; thus the percent you will earn holding the foreign asset while protecting against exchange-rate change by selling the foreign currency forward. Covered writingCovered writingIn the case of call writing, covered means having a holding of shares at least equal to that implied by the short call option position, and in the case of put writing, covered means having a cash sum sufficient to take up the underlying security if assigned on the short put position. Covered optionCovered optionOption position that is offset by an equal and opposite position in the underlying security. Antithesis of naked option. Covered combinationCovered combinationA strategy in which one call and one put with the same expiration, but different strike prices, are written against each 100 shares of the underlying stock. Example: writing 1 XYZ Jun 50 call and 1 XYZ Jun 55 put, and buying 100 shares of XYZ stock. In actuality, this is not a fully 'covered' strategy because assignment on the short put would require purchase of additional stock. Uncovered call writingUncovered call writingA short call option position in which the writer does not own an equivalent position in the underlying security represented by his option contracts. Further SuggestionsuncoveredCovered Straddle Write Uncovered Put writing Covered call Uncovered options Covered Interest Rate Parity Covered position covered straddle Covered interest arbitrage Covered interest parity covered warrant Covered Straddle Covered or hedge option strategies Uncovered interest parity Covered Covered interest arbitrage Covered call writing strategy Covered position |
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