Definition: [crh] A written option is considered to be covered if the writer also has an opposing market position on a share-for-share basis in the underlying security. That is, a short call<Definition: /A> is covered if the underlying stock is owned, and a short put is covered (for margin purposes) if the underlying stock is also short in the account. In addition, a short call is covered if the accDefinition: ount is also long another call on the same security, with a striking price equal to or less than the striking price of the short call. A short put is covered if there is also a long put in the accounDefinition: t with a striking price equal to or greater than the striking price of the short put.
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