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Covered option

Covered option Definition

A short call or put option position that is covered by the sale or purchase of the underlying futures contract or other underlying instrument. For example, in the case of options on futures contracts, a covered call is a short call position combined with a long futures position. A covered put is a short put position combined with a short futures position.

RELATED TERMS
Call option
Put option
RELATED CATEGORIES
Options & Futures




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