A popular options trading strategy to generate income through options premiums. To execute this call, an investor holds a long position in an asset while selling call options on that same asset. It is a strategy utilized by an investor who plans to hold an underlying stock for a long time but doesn’t expect a substantial price increase in the near future. This is ideal for investors in relatively stable stocks. This makes covered calls a neutral trading strategy.
We don't know everything about the markets. We're just devoted to learners. Taken from those smarter than ourselves, here's how we define Covered Call.