Covered Writer Law and Legal Definition
Covered writer is a seller or writer of a call option who owns the underlying asset or has sufficient cash to buy the underlying asset that may be required for delivery. The risk involved is minimal as the seller already owns the underlying asset and can simply sell it to the holder rather than needing to buy the asset at the current market price, which is usually higher than the strike price.
Legal Definition list
Related Legal Terms
- After-Discovered Evidence
- Board of Fire Underwriters
- Chartered Life Underwriter [CLU]
- Chartered Property and Casualty Underwriter - CPCU
- Commingled Covered Commodities [Agriculture]
- Covered Active Duty
- Covered Agreement
- Covered Air Carrier [Aeronautics and Space]
- Covered Allied Persons
- Covered Beryllium Illness
