Definitions for "Covered Option"
Keywords:  underlying, writer, option, offset, xyz
A short call or put option position which is covered by the sale or purchase of the underlying futures contract or physical commodity.
An option contract backed by the shares underlying the option. An option is covered when the person who owns stock sells call options in that stock since if the price goes up, the seller is in a position to deliver the stock to the buyer without going to the market first.
Covered or hedge option strategies Covered position