A call option is a contract that guarantees its owner ... Covered calls are usually written by investors who are long on a stock (i.e., they own it and don’t plan to sell it in the near future ...

The fund collects the option premiums and distributes them to shareholders in the form of high yields. The downside is that layering a written call option on top of a position alters its return ...

Both options would have the same expiration date ... out of pocket (hence the name "costless collar") because the written call premiums would cover most, if not all, of the cost of buying the ...