A covered call occurs when a trader sells (or writes) call options on an asset in which they have a long position. They are also referred to as buy-writes.

Selling a covered call allows you to profit from an asset you already own, but only if the asset's price does not exceed the strike price of the option you sold before it expires. In this case, the option will be worthless, and you will profit from the premium.

If the asset's price rises above the strike price, your profits are limited to the difference between the strike price and the purchase price. At this point, you can buy an option with the same strike price and expiration date to offset the amount of potential profit you've lost.

An uncovered call is the sale of an option on an asset that you do not own.

A covered call is an options trading strategy in which an investor holds a long position in an asset, such as stocks, and simultaneously sells (writes) a call option on the same asset. This strategy aims to generate additional income through the premium received from selling the call option.

The call option gives the buyer the right, but not the obligation, to purchase the asset at a specified strike price before the option's expiration. If the asset's price stays below the strike price, the seller keeps both the asset and the premium. However, if the price exceeds the strike price, the seller may have to sell the asset at that price, potentially limiting gains.

Covered calls are typically used in neutral to mildly bullish markets.