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    The covered call is not only one of the most common, but it is also one of the most easily understood methods used by options investors. This article provides a brief overview of covered as well as information about how to get started in covered call investing.

    A covered call is a very simple device to understand. It is a type of option where the investor writes call contracts to sell an equity or commodity at a certain price, on or before a specified end-date. For each call contract written, the investor must hold 100 shares of the underlying security. The investor is paid a premium when the call contracts are sold. This premium is paid to the investor by the buyer of the options contract, which results in money deposited into the investo

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    rovides a brief overview of covered as well as information about how to get started in covered call investing.

    A covered call is a very simple device to understand. It is a type of option where the investor writes call contracts to sell an equity or commodity at a certain price, on or before a specified end-date. For each call contract written, the investor must hold 100 shares of the underlying security. The investor is paid a premium when the call contracts are sold. This premium is paid to the investor by the buyer of the options contract, which results in money deposited into the investo

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    vice to understand. It is a type of option where the investor writes call contracts to sell an equity or commodity at a certain price, on or before a specified end-date. For each call contract written, the investor must hold 100 shares of the underlying security. The investor is paid a premium when the call contracts are sold. This premium is paid to the investor by the buyer of the options contract, which results in money deposited into the investo
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    pecified end-date. For each call contract written, the investor must hold 100 shares of the underlying security. The investor is paid a premium when the call contracts are sold. This premium is paid to the investor by the buyer of the options contract, which results in money deposited into the investo
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    e call contracts are sold. This premium is paid to the investor by the buyer of the options contract, which results in money deposited into the investor’s account. Simply put, a covered call is termed “covered” because the investor owns 100 shares of the underlying for every 1 call option sold. A covered call uses the term “call” because the investor is selling call options.

    Example – Writing Covered Calls

    An investor holds 1000 shares of QQQQ on August 16 th, 2006 valued at $37.70 per share

    The investor writes 10 call options at $39.00 per share strike price for his QQQQ holdings with an expiration date of Friday September 15, 2006 @ $.30 per share

    When the call options sell, the investor receives

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