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Is NASDAQ-100 Index Tracking Stock eligible for covered call writing?

April 26, 2017Covered eligible index nasdaq-100 stock writing

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Is NASDAQ-100 Index Tracking Stock eligible for covered call writing?

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Yes, this strategy is used both to increase the return on your NASDAQ-100 Index Tracking Stock and to provide a limited amount of downside protection. It is implemented by writing (selling) a call against the NASDAQ-100 Index Tracking Stock that you own by simultaneously purchasing NASDAQ-100 Index Tracking Stock and writing calls on it.