covered option


Also found in: Dictionary, Financial.
Related to covered option: Covered put, covered call option
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  • noun

Words related to covered option

a put or call option backed by the shares underlying the option

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References in periodicals archive ?
Also, the fund will increase the maximum part of its portfolio that may be invested in preferred equity securities from 25% to 40%; the amount of leverage it may use for investment purposes from 25% to 33 1/3% of its managed assets, the maximum permitted; and suspend its strategy of writing (selling) covered options on broad-based indices of securities.
He then sells 100 million covered options, which fetch ten cents on the dollar and thus net $10 million.