Covered option

{
  "id": "MLC-T-LAW-001378",
  "term": "Covered option",
  "field": "Law",
  "definition": "An options strategy where the seller of a call option simultaneously owns the underlying asset, or the seller of a put option has sufficient cash to purchase the underlying asset. This ownership or cash position provides protection against potential losses if the option is exercised. The covered call is a common strategy for generating income from existing stock holdings.",
  "url": "https://mlchart.com/terminology/law/covered-option/"
}