Covered Call

From iOptioneer - an advanced option trading reference for iPhone

Covered call is a short position in a call option where you simulteneously hold a long position of the same quantity in the base asset. As the name covered implies, you can cover the losses of the call position, originating from a surge in the base price, by selling the underlier at a higher price than it was bought for. Covered calls have limited profit potential and the maximum loss when the price of the base asset goes to zero.

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See also covered put, naked call, naked put.

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European call struck at 10.000 with expiry in 30 days



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