Downside Protection

Definition: [crh] Generally used in connection with covered call writing, this is the cushion against loss, in case of a price decline by the underlying security, that is aDefinition: fforded by the written call option. Alternatively, it may be expressed in terms of the distance the stock could fall before the total position becomes a loss (an amount equalDefinition: to the option premium), or it can be expressed as percentage of the current stock price.

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