covered combination

Definition

An option strategy involving concurrent transactions that places an investor on both sides of the market in order to benefit from any possible move in the price of a stock. The strategy is executed by selling a call option and a covered put option, both out-of-the-money with the same expiration date for which the seller receives cash premiums from each. A covered put sale requires that the stock of the underlying security be held in an account; however, the premium will lower the cost basis of owning the stock.
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covered call covered foreign currency loan