(plural covered calls)
- An investment containing two parts: (1) long stock, and (2) short call option. It is an income oriented strategy that is conservative in nature. The investor hopes to earn the time premium portion of the call option.
covered call - Investment & Finance Definition
A short call option that gives the buyer the right to purchase the underlying security at a pre-determined price that is collateralized by the call writer who actually owns the underlying security. Also called covered call writing.