What are Covered Call Options?

Covered Call Options / Covered Calls

Call writers are consider to be covered if they have any of the following positions:

• Along position in the underlying asset.
• An escrow-receipt from a bank.
• A security that is convertible into requisite number of shares of the underlying security.
• A warrant exercisable for requisite number of shares of the underlying security.
• A long position in a call on the same security that has the same or the lower strike price and that expires at the same time or later than the option being written.