Covered call is selling a call option ie. you are obligated to sell your stock to the buyer of the call option. Covered it is because u have the underlying security in your portfolio or a cross hedge. Covered call would need repeated skimming of premiums. Hence I opted for the protective put on the NIFTY july futures. It all boils down to probability that how many options get exercised and who gets to be on the receiving end.
A covered call would be adopted in cases where the market is moving listlessly and you have to make your margins. For the long term investor, the protective cross hedge put looks better as continuous monitoring is not required.
That is the advantage of European options and in India, the Indice based options are european options which are exercisable only on expiry. The share based options are American options which can be exercised anytime before expiry. Hence an option pricing model would have to profile the investors.
