Define a “Covered Call” Strategy and How a DAO Could Use It

A covered call is an options strategy where an investor holds a long position in an asset and simultaneously sells (writes) call options on that same asset. The "cover" refers to owning the underlying asset, which protects the seller if the buyer exercises the option.

A DAO treasury can use this strategy on its reserve assets to generate immediate premium income, effectively creating yield, while being willing to sell the underlying asset if the price rises above the strike price.