Derivatives

Covered Call

Selling call options against shares you already own to generate income.

In depth

Premium received provides income or downside cushion. Trade-off: caps upside above the strike price. Popular in income-oriented portfolios on stable, dividend-paying stocks. Doesn't protect against significant declines — you still own the stock.

Frequently asked about Covered Call

What is Covered Call?

Selling call options against shares you already own to generate income. Premium received provides income or downside cushion. Trade-off: caps upside above the strike price. Popular in income-oriented portfolios on stable, dividend-paying stocks. Doesn't protect against significant declines — you still own the stock.

Why does Covered Call matter for investors?

In derivatives, Covered Call is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.

How is Covered Call used in practice?

Premium received provides income or downside cushion. Trade-off: caps upside above the strike price.

Recent news mentioning Covered Call

India Rooftop Solar Installations Double in FY26, 21.2 Lakh Homes Covered

The Quick Take * ~21.2 lakh (2.12 million) households benefited from rooftop solar installations in FY26, a 2x surge YoY * Maharashtra, Uttar Pradesh, and Gujarat led rooftop solar adoption under the government scheme * No analyst or institutional response cited in available coverage; single source report limits confirmation * Accelerating rooftop solar rollout signals continued policy push under India's PM Surya Ghar Muft Bijli Yojana * India's solar manufacturing and EPC sector gains glo

May 8, 2026

Related terms

Call Option

A contract giving the right to buy a stock at a specified strike price by an expiration date.

Options

Contracts giving the right (not obligation) to buy or sell an asset at a set price by a set date.

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