Covered call意思
"Covered call" is a term used in the context of options trading, specifically in stock options. It is a strategy that involves simultaneously holding a long position in a stock and writing (selling) call options on that same stock.
Here's how a covered call strategy works:
- Long Position in Stock: The investor owns shares of a particular stock.
- Selling Call Options: The investor sells call options on that stock to another investor. A call option gives the buyer the right, but not the obligation, to buy the stock at a specific price (the strike price) before a certain date (the expiration date).
The goal of a covered call strategy is to generate income from the premiums received when selling the call options, while still maintaining the upside potential of the underlying stock to a certain extent.
Here are some key points about covered calls:
- Income Generation: The premium received from selling the call option is immediate income for the investor. This can be attractive to investors looking for passive income or to lower their cost basis in the stock.
- Limited Upside Potential: By selling the call, the investor limits their potential upside on the stock to the strike price of the call minus the premium received. If the stock price rises above the strike price, the investor will have to sell the stock at the strike price to the call buyer.
- Protective Position: The investor is "covered" because they own the stock, which means they are not exposed to unlimited risk. If the stock price falls, the investor can still hold the stock and benefit from any future price increases.
- Risk of Early Assignment: If the stock price rises close to the strike price of the call, the option may be exercised early, forcing the covered call writer to sell their shares at the agreed-upon strike price.
Covered calls are considered a relatively conservative options strategy because the investor is protected against large losses due to the long position in the stock. However, the strategy can also limit the potential gains if the stock price rises significantly above the strike price.
It's important for investors to consider their investment goals, risk tolerance, and the potential tax implications of options trading before implementing a covered call strategy.