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The call option is "covered" because you own the shares on which it is based, as opposed to the riskier "naked" option, in which you do not own any of the shares.
Also known as a naked option.
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The tired old saw of "a dating show with a difference" proved true in this case, as participants shed all their clothes, and chose a date from a line-up of naked options (it wasn't all out there immediately – bits of them appeared gradually from a frosted glass box, like St Paul's emerging from a morning mist).
She changed her outfit many, many times (when you're naked, the options are endless), dressing up like a lion and a horse, and ending the evening with her hit Slave to the Rhythm while hula-hooping in heels.
On Wall Street you get it selling naked put options, buying junk bonds or operating Long-Term Capital Management.
I have never sold naked put options but I have used covered call writing to enhance the return on my portfolio since the early 1970s.
In effect, auditors have become the insurers of financial statements, writing what Mr Fusco likens to a naked (ie, unhedged) option: "You get unlimited exposure for a limited reward," he says.
The weapon used was not shorting, legitimate or naked, but put options, which give the buyer the right to offload shares at a fixed price in the future.
All those sales were made by Feb. 8. "We knew we had some open or naked positions on options we had to close out," said Gary Kennedy, Allied Irish's group director of finance and risk, in a conference call.
He is also pushing broadband access, even introducing "naked D.S.L.," an innovative option that allows customers to get a high-speed Internet line without having to buy phone service.
'A kind of Eve.'" Making her anything less than perfect is not an option: this naked Eve is clearly a replacement for the Duke's French wife, who has fled their marriage for glittering Paris, and whom he still passionately, hopelessly loves.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com