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Investing Glossary:
Covered
Copyright 2012,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
- C -
| Term: |
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| Definition: |
| Writing an option when the writer also own the Underlying security On a one to one ratio. A short Call is Covered if the underlying security is owned. A Short put is covered if the underlying security is also short in the account. A short call is covered if a long call of the same underlying security is owned in the same Account with the same or lower strike. A short put is covered if a long put of the same underlying security is owned in the same account with a strike price equal to or greater than the strike of the short put.
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