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

Ask

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

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Opening Call

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

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Bracketing

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

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Negative Amortization

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

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OR

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

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Expiration

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

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