Skip to main content

How Does Selling a Covered Call Affect the Overall Delta of the Portfolio?

Selling a covered call reduces the overall positive delta of the portfolio. The long stock position has a positive delta of +100 (for 100 shares), and the short call option has a negative delta (between 0 and -100).

By combining them, the portfolio's net delta is reduced, making the position less sensitive to price increases and more stable. The strategy is partially delta-hedged.

How Does ‘Gamma’ Relate to and Affect an Option’s Delta?
Compare the Risk/reward Profile of a Covered Call to a Naked Call
What Is a “Covered Call” Strategy and How Does It Relate to Yield Generation on a Crypto Asset?
What Is the Difference between a Covered Call and a Naked Call?