Covered Call / Covered Call Writing
An open short option position that is fully offset by a corresponding stock or option position. A covered call could be offset by long stock or a long call, while a covered put could be offset by a long put or a short stock position. This insures that if the owner of the option exercises, the writer of the option will not have a problem fulfilling the delivery requirements.
All glossary definitions courtesy of
Glenn R. Pafumi, CFA at OptionTraderOne
Glenn R. Pafumi, CFA at OptionTraderOne
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