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Technical Analysis - Financial Glossary
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Covered |
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Writing an option when the writer also own the underlying security on a one to one ratio. A short call is covered if the underlying security is owned. A short put is covered if the underlying security is also short in the account. A short call is covered if a long call of the same underlying security is owned in the same account with the same or lower strike. A short put is covered if a long put of the same underlying security is owned in the same account with a strike price equal to or greater than the strike of the short put. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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