COVERED POSITION
covered position: translation
A transaction which has been offset with an opposite and equal transaction; for example, if a gold futures contract had been purchased, and later a call option for the same commodity amount and delivery date was sold, the trader's option position is "covered." He holds the futures contract deliverable on the option if it is exercised. Also used to indicate the repurchase of previously sold contracts as, he covered his short position. The CENTER ONLINE Futures Glossary
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Use of an option in a trading strategy in the underlying asset which is already owned. Bloomberg Financial Dictionary