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A covered call is a financial market transaction in which the seller of call options owns the corresponding amount of the underlying instrument , such as shares of a stock or other securities. If a trader buys the underlying instrument at the same time the trader sells the call, the strategy is often called a " buy-write " strategy. In equilibrium, the strategy has the same payoffs as writing a put option. The long position in the underlying instrument is said to provide the "cover" as the shares can be delivered to the buyer of the call if the buyer decides to exercise. Writing i.