Die Heuning Pot Literature Guide
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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.

Covered Options

Definition:

Selling options where you have a sufficient position in the underlying security to shield you from adverse price movements. If you sell call options and have the underlying stock, you aren't going to be happy if the stock rises because you'll lose the stock, but at least you won't have to "cover" in the market at a higher price.

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