A buy-write strategy, also referred to as a covered call, is an options trading approach in which an investor simultaneously purchases shares of an underlying stock and sells a call option on those same shares. This strategy is designed to generate “income” by collecting options premiums received from selling call options, while the owned shares serve as collateral, thereby limiting the risk associated with the short call position. The strategy is moderately bullish. It involves buying/owning the underlying shares. If one owns an asset, any rational investor would want the value of that asset to rise. But, by selling an upside call option, the investor will be obligated to sell the shares at the strike price if holders of those calls…
Sep 15 2025
