Consider a hypothetical example in which you hold a share bought at 100 yen and sell a call with a strike price of 110 yen for a premium of 2 yen. If the share price at expiry is 110 yen or higher, the profit stops at 110 − 100 + 2 = 12 yen. At a share price of 120 yen, holding the share alone gives a profit of 20 yen, but the covered call gives 12 yen. Below 110 yen, the profit and loss equals that of the share plus 2 yen, and the break-even point is 98 yen. On the downside, the loss is 2 yen smaller than holding the share alone, but it keeps growing as the price falls.
Covered call
- Japanese
- カバード・コール
- Last reviewed
- September 25, 2026
This is a draft, shown for review before publication.
A covered call is a combination in which you keep holding the underlying asset and sell a call option (call) on that asset. The premium received adds to the profit and loss, but the gain from a rise in the underlying is capped.