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4 votes

Why do one's current holdings matter when selling calls?

Another way to look at it is that with a covered call, the stock is already in the box and so if they are called away from you, you will not have to buy the stock in the open market and therefore have ...
AlRacoon's user avatar
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2 votes

Why do one's current holdings matter when selling calls?

The fact that you own the shares provides a hedge against losses on the call if the stock rises. And hedging is important in options trading. This is a very popular strategy (covered calls) and ...
nbbo2's user avatar
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3 votes

Why do one's current holdings matter when selling calls?

A (short) naked call is a bearish trade (seller makes money in the form of premium if asset price falls) while a covered call is bullish trade (seller makes money if asset price rises). In this sense, ...
user35980's user avatar
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