Graduated call writing

Definition:

Selling covered call options at incrementally rising exercise prices, so that as the price of the underlying stock rises and the options are exercised, the seller receives a higher average price than the original exercise price.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Deferred tax expense

A non-cash expense that provides a source of free cash flow. Amount allocated during the period to cover tax liabilities that have not yet been paid.

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