A covered call is a two part investment: (1) you are long stock, and (2) you are short a call option on that stock. The call option is called 'covered' in this case because if the call buyer exercises his right to buy the stock, then you already own the stock necessary to fulfill your obligation.xample: If you buy 1 call option on XYZ stock with a March expiration and a strike of 50, then you have purchased the right to exercise it and buy 100 shares of XYZ stock at $50/share any time between now and the 3rd Friday in March (monthly options always expire on the Saturday after the 3rd Friday of the month).