Covered Call

Covered Call

Our covered call strategy is comprised of hedged-equity portfolios that strive for a high-level of distributable income. An active stock selection process narrows candidates to a field of 30-50 mid- and large-cap growth companies that have favorable price/earnings-to-growth (P.E.G.) ratios, financial strength and industry leadership. 

We typically write out-of-the-money calls, which allow for the potential for upside participation if the underlying stock prices advance, while also generating income from premiums. Multiple calls are often written on the same stocks: the range of strike prices and option expiration dates may maximize the protective value to the strategy and spread income evenly throughout the year. We will also use option tools, such as cash-secured equity put writing, in an effort to increase income and add to existing holdings and index put protection.


Covered Call and Equity Income Fund

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  • The writer of a covered call option forgoes, during the option’s life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the strike price of the call, but retains the risk of loss should the price of the underlying security decline.

  • “Madison” and/or “Madison Investments” is the unifying tradename of Madison Investment Holdings, Inc., Madison Asset Management, LLC, and Madison Investment Advisors, LLC, which also includes the Madison Scottsdale office.  Madison Funds are distributed by MFD Distributor, LLC.  Madison is registered as an investment adviser with the U.S. Securities and Exchange Commission.  MFD Distributor, LLC is registered with the U.S. Securities and Exchange Commission as a broker-dealer, and is a member firm of the Financial Industry Regulatory Authority. 

    Madison Investments shares all personnel and resources at their Madison, Wisconsin location. Statistical data is for the consolidated Madison organization. The Madison organization consists of its holding company, Madison Investment Holdings, Inc. and its affiliates: Madison Asset Management, LLC; Madison Investment Advisors, LLC; and Hansberger Growth Investors, LP. Asset information presented includes non-discretionary assets. Refer to each entity’s Disclosure Brochure for more information.