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Covered calls and protective puts

Two common ways options are paired with shares.

5 min · Advanced · Lesson 17 of 17

Step 1 of 4

Covered calls

In a covered call, someone who owns 100 shares sells a call on them. They collect the premium; in return, if the stock rises above the strike, they may have to sell their shares at the strike and give up gains above it.

For entertainment and education, not investment advice.