A call option gives the holder the right to buy a stock at a specific price (the strike price) at a future point in time. A covered call option is an option that is sold on a stock that is held by the seller. If the call option is exercised, the seller of the option is covered because he/she holds the stock (i.e. the liability on the call option is fully offset by the increase in the stock price above the strike price). The Equity Portfolio will notionally sell 3-month (approximately) covered call options on each of the 30 stocks held. The Equity Portfolio will never notionally sell an uncovered call option.