Covered Call Writing/Option

Covered Call Writing/Option Writing, i.e. selling a CALL OPTION on equity shares one actually owns. One makes a profit by selling an option if one expects the price of the share of fall or not rise for some time. The profit comes from the premium received on the sale. However, if the price of the share rises, such a person has to sell the shares at the EXERCISE PRICE. See also NAKED CALL WRITING.

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