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During the profit and loss (P&L) chart higher than, note that because the inventory cost raises, the negative P&L from the call is offset by the prolonged shares. Since you receive a quality from selling the decision, given that the inventory moves throughout the strike price tag towards the upside, your quality allows you to correctly provide your inventory at a better degree as opposed to strike price tag: strike value moreover the high quality acquired.
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When To employ It: Frequently made use of when an Trader is bullish about the underlying asset and expects a reasonable increase in its cost.
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The way it Works: To execute the method, you buy the underlying stock as normal and at the same time write—or sell—a simply call solution on those same shares.