Business and Personal Finance Dictionary

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• COVERED WRITE
  
  Is the sale of an option against a position in the underlying instrument. Often this is the sale of a call against a long position in the stock. It could also be the sale of a put against a short position in the stock. Here, if the put is exercised, a long stock position is assigned to the seller of the option. Then this newly acquired long position is offset by the previously held short position. The covered write can also apply to warrant and other option positions.
  
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