Well Puts

I use the covered call strategy quite often. With a covered call I am writing a call option contract while I am own an equivalent number of shares of the underlying stock. The stock I hold “covers” the obligation conveyed by writing a call option contract. This is a widely-used strategy and shows the benefits of combining options with stock ownership.

If the stock is purchased while simultaneously writing a call contract it is known as a “buy-write.” If the shares are already held from a previous purchase, it is commonly referred to an “overwrite.”