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A covered call means that you own the underlying stock on the option you are selling. Say you own 100 shares of apple computer. You sell ONE call option which allows the buyer of the option to purchase the underlying 1oo shares of stock at the strike price. If the contract matures, you can then deliver the stock to the option buyer.
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Why would an investor sell a covered call?
An investor will sell a covered call if the price of the stock or contract is losing its value. This way, the option on the terms of the contract will not be a zero loss, but close to something that is in the benefit to the investor. The purpose of buying a covered call is to make money with the intention of the stock climbing rather than decreasing.
When you sell a call option who gets the dividend?
Dividends don't play into call options. If you sell a covered call and it expires worthless, you'll receive any dividends from the stock because you still own the stock. If it's exercised, the new owner receives them because the stock is hers now. The money that changes hands when you sell a call is the "premium," and the person who sells the call gets that.
What is the difference between selling a naked put vs. selling a naked call?
Selling a naked put is a bullish strategy, and is mathematically the same as a covered call write, where you buy something and sell a call against it. Selling a naked call is a bearish strategy, and is the same as covered short write, where you short something and write a put against it. In either case, you make money from time decay, falling volatility, or a move in the direction that you want.
What do you call a covered parking in a hotel?
I'd call that a parking garage.
What is the definition of a covered call?
A covered call is a finanacial transaction which is started by the owner of a stock. This is where you attempt to trade in a stock and receive a new one.
What is the symbol for Madison Covered Call and Equity Strategy Fund in the NYSE?
The symbol for Madison Covered Call & Equity Strategy Fund in the NYSE is: MCN.
In what year did Madison Covered Call and Equity Strategy Fund - MCN - have its IPO?
Madison Covered Call & Equity Strategy Fund (MCN)had its IPO in 2004.
What do you call a Two wheeled covered carriage?
hansom
What do you call a lamb covered with chocolate?
A Candy Baa
What is the symbol for Recon Capital NASDAQ-100 Covered Call ETF in NASDAQ?
The symbol for Recon Capital NASDAQ-100 Covered Call ETF in NASDAQ is: QYLD.
How do you sell items on Call of Roma?
you cant sell items, but you can sell the account including the item.
What happens if you write a covered call with a LEAP and someone wants to exercise the underlying option?
If you are "called" on your short option you will have to sell the Underlying contract for that option at the option's strike price, which will likely be the stock itself. You will then have two positions; a long LEAPO and a short stock. http://www.optiontradingtips.com/strategies/covered-call.html
