If you sell a certain type of option and you already have or get the thing you’re supposed to sell through that option, you’re called a covered call writer.
EXAMPLE: An individual owns 100 shares of XYZ common stock. If she writes one physical delivery XYZ call option—giving the call holder the right to purchase 100 shares of the stock at a specified exercise price —this would be a covered call. If she writes two such XYZ calls, one would be covered and one would be uncovered.
