Covered call

A covered call is one of the popular options trading approaches that entail selling (or “writing”) call options on a security that a trader already owns. The trader will be paid a premium in exchange for granting the buyer the right to purchase the asset within the specified period for a certain “strike price.” Selling covered calls is a very cautious approach in the realm of options trading because the trader will incur no further costs if the option holders exercise their right to purchase the asset.