StocksOntario Securities Commission Operating Income Dividend/Distribution Record Date Capital Stock Breakout Tests Averages and Indices
Covered
When a writer holds the underlying security and writes an option on a one-to-one basis with the stock, it is known as writing a covered option. This can be either a short call or a short put, depending on the position of the underlying security in the account. A short call is covered if the underlying security is owned, while a short put is covered if the underlying security is short in the account. Additionally, a short call is covered if a long call of the same underlying security is held in the same account with the same or lower strike price. Similarly, 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.
Related terms
Understand the meaning and definition of Ontario Securities Commission in the context of stock market, trading, and investments.
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