Trading Terms

Covered Write

When writing a call against a long position in the underlying stock, the goal is to receive a premium in order to gain additional return on the common stock or provide some protection against a decrease in the stock's value. This protection is limited to the premium amount minus any transaction costs. By taking this step, the writer is able to potentially increase their gains or mitigate potential losses.

Related terms

Drawdown

Understand the meaning and definition of Drawdown in the context of stock market, trading, and investments.

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Sector Rotation

Understand the meaning and definition of Sector Rotation in the context of stock market, trading, and investments.

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Estimated EPS Change

Understand the meaning and definition of Estimated EPS Change in the context of stock market, trading, and investments.

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Adverse Excursion

Understand the meaning and definition of Adverse Excursion in the context of stock market, trading, and investments.

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CTI2

Understand the meaning and definition of CTI2 in the context of stock market, trading, and investments.

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Uncovered Option

Understand the meaning and definition of Uncovered Option in the context of stock market, trading, and investments.

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