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What is a covered call?

A covered call is a popular options strategy used to generate income for investors who think stock prices are unlikely to rise much further in the near term. A covered call is constructed by holding a long position in a stock and then selling or writing call options on that same asset, representing the same size as the underlying long position.

What is a covered call in options trading?

While the covered call is a basic strategy in options trading, understanding more advanced concepts like delta, extrinsic value, and implied volatility can help an investor strategically select the stock to buy and the option to sell.

What is a covered call strategy?

A covered call strategy is an options trading strategy where an investor holds a long position in a specific stock or other underlying asset and simultaneously sells a call option on that same asset.

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