buy-and-write strategy

Buy-and-write strategy

An options strategy that calls for the purchase of assets and the writing of covered call options on them.

Buy-and-Write Strategy

An investment strategy in which an investor writes an option while holding an equal and opposite position on the underlying asset. A buy write call option occurs when the investor owns the underlying asset and writes a call so that the underlying is on hand to sell to the option holder if the option is exercised. A buy write put option occurs when the investor writes a put has enough cash to cover the strike if the put is exercised. It is thought that utilizing buy-and-write strategy is a beneficial tactic as the investor may profit from the option premium. See also: Covered option.

buy-and-write strategy

The investment strategy often used by covered writers in which stock is purchased and call options written. A buy-and-write strategy is a fairly conservative approach to generating maximum current income from option premiums and dividends.