Covered Call

Covered call is an investment strategy where an investor sells calls on a stock he owns, usually at a strike price above  the current trading price.  This allows the investor to collect premium from selling the call, lowering his average purchase price, but it also limits the upside of the investment, as if the stock price rises above the strike of the option(and remains there by the time the option expires), the stock may be called away and the investor loses any upside above the strike price.

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